At Savills we’ve written a lot over the last few years about how a booming life sciences investment market has driven a new spate of requirements around the world for both corporate and laboratory space to house growing companies in the sector.
What’s been less explored, but came to the fore during the pandemic and remains relevant during ongoing geopolitical uncertainty, is the role that manufacturing space and distribution supply chains play in producing and delivering at scale pharmaceutical products that may have been initially conceived and developed in offices and labs thousands of miles of away.
India, for instance, is home to the two biggest vaccine manufacturers in the world: the Serum Institute of India (SII) and Bharat Biotech. While the country will remain pivotal in delivering products to meet the world’s medical needs, the febrile nature of global supply chains over the past 24 months has led to the sector putting greater emphasis on the resilience of its supply chains, including re-shoring or near-shoring some manufacturing facilities to bring products closer to markets, to cut costs, carbon emissions and the risk of disruption.
Re-shoring manufacturing to a company’s domestic home may be easier said than done in some locations: the world’s top life sciences clusters are currently based in and around major cities in the UK, China and US. Here, land can be scarce and may be competed over by logistics and residential developers, although the strategic national importance of the life science sector in many countries often brings with it government support which will help ease the way and fund the acquisition of sites.
Near-shoring, as an alternative or dual strategy to re-shoring, to other countries nearby is therefore a potential solution. Just as we’re seeing in other manufacturing sectors which have also had to face supply chain disruption recently, life science requirements are growing in a number of emerging markets with skilled and cheaper labour.
These include locations around Houston and Atlanta in the US and in Southern and Eastern Europe. According to Savills Nearshoring Index, the Czech Republic, Portugal, Poland, Hungary and Romania look like the most suitable locations to fulfil the latter need.
Further information
Contact Paul Tostevin or Eri Mitsostergiou
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