Montreal’s Life Sciences Sector Is Having a Renaissance
February 9, 2022 3 Minute Read
In the age of pandemic, most everyone is talking about life sciences, especially as it concerns Canada’s domestic capacity to develop and produce vaccines.
So it’s worth noting that Montreal’s life sciences sector is in the midst of a renaissance, with life sciences tenants out in the market seeking up to 2 million square feet of cutting-edge lab space for their research and development, analytics and production operations.
Here’s what they like about Montreal:
- Quebec is one of North America’s largest life science and health technologies hubs, home to more than 1,000 companies in the sector.
- There are more than 40,000 students in life sciences and STEM-related (Science, Technology, Engineering and Mathematics) programs in the province’s higher education institutions.
- And Montreal is one of the most affordable real estate markets on the continent in terms of operating costs.
All factors that bode well for a sector that had seen a significant decrease in its research and development facility footprint over the years.
“Montreal was once home to a robust life sciences research and development industry, but the outsourcing of R&D activities by big pharma head offices for cost savings left us primarily with sales, administrative and marketing divisions” says Jeremy Kenemy, leader of CBRE’s Life Sciences Team in Montreal. “But as government and businesses seek to increase production capacity, expertise and innovations here in Canada, Montreal is once again leading the way.”
“We have facilitated hundreds of thousands of square feet of life sciences transactions recently and we are seeing more and more forward-thinking landlords converting buildings to accommodate lab users,” Kenemy adds. “We’ve been approached by dozens of high-profile owners and developers in the last 36 months who are eager to better understand how to go about building or converting space to labs.”
Some of the latest activity:
- Laval Biotech City is at the centre of the Montreal life sciences rebirth, hosting world-renowned biopharmaceutical firms and research institutes employing more than 5,000 individuals across 13 million sq. ft.
- A major U.S. player, Alexandria Real Estate Equities, is converting older space in Laval Biotech City into state-of-the-art lab facilities.
- It’s also where Biodextris is in the midst of a multimillion-dollar conversion of a LEED Gold office building into a 26,000 sq. ft. lab facility.
- Across the road, IniXium recently moved into a 7,000 sq. ft. lab facility – formerly a barn – with advanced state of the art electromechanical systems designed to support highly specialized lab equipment such as fume hoods.
- And homegrown HarveyCorp. is buying up flex office buildings across Greater Montreal and converting them to labs.
These developments are just the latest in what is shaping up to be a transformative period for the life sciences industry in Montreal, says Kenemy. “Landlords and investors are coming to appreciate the significant opportunity in life sciences while also supporting the wellbeing of all Canadians. It’s great to see Montreal reassert its dominance in the realm of life sciences.”
Risks and Rewards
While there are risks involved in developing life science spaces – more churn in leasing and higher up-front costs to fit out these highly specialized spaces – there are also considerable long-term rewards for landlords who support the growth of the next big thing.
“The universe rewards the bold – early adopters who invest in this space benefit from an inherent ‘tenant stickiness’ later,” says Kenemy. “If a landlord sets themselves up well in this space and the demand continues to grow as the population gets older and needs more health support, the solid life sciences tenants will grow with them over time.”
And we can all breathe easier knowing that our life sciences sector is gathering momentum.
Stephanie Garant considers real estate to be a critical component of economic growth and social development. After several years in marketing and sales, she joined CBRE Montreal’s capital markets team in 2018.
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