Life Sciences Real Estate Strategy
About the strategy
In partnership with Ivanhoe Cambridge, real estate subsidiary of Canadian pension fund CDPQ, Lighthouse Canton has setup a platform, Neovantage Innovation Parks, which owns, develops, operates and manages high quality life sciences real estate focused on innovation. The Neovantage portfolio is the largest life sciences R&D real estate portfolio* in India
c. 1.2mn sq ft
Portfolio Size
11
Buildings
2 under construction)
97%+
Occupancy
27
Tenants
Neovantage Innovation Parks
Neovantage provides an ecosystem of integrated lab-office campuses and buildings dedicated to research and innovation. Strategically located in Genome Valley, Hyderabad, India, which is India’s first, largest and most successful life sciences cluster with presence of over 200+ companies and c. 20,000 professionals.
The Neovantage portfolio prides itself on sustainability and boasts LEED Platinum and Gold rated R&D buildings
Focus on life sciences and allied sectors including agri-sciences, medical technology, and specialty chemicals
Neovantage provides holistic infrastructure solutions to the life sciences industry across real estate development, operations and facility management
Tenants include marquee global multinational and premier Indian pharmaceutical and biotechnology companies
Why Life Sciences Real Estate
Provides stable, attractive and rising yields with high potential returns.
Has low vacancy risks driven by long term leases with an escalation clause and high tenant stickiness due to significant capital outlay by tenants on setting up occupied lab spaces.
Has low sensitivity to economic cycles and high predictability of cash flows driven by the focus on life sciences.
Key Drivers for Growth
Demand for life sciences real estate is driven by the growth in the life sciences sector. Life Sciences companies have seen an increased flow of capital towards the industry’s focus on finding solutions to challenges of:
- Changing demographics (An ageing population) - global average life expectancy has risen from 47 years in 1950 to 73 years in 2020 necessitating increased expenditure on healthcare
- Rise of chronic and lifestyle diseases – Increasing investments from companies towards development of targeted/tailored treatments as against traditional methods
Increased capital flows are leading to an increased demand for research lab and innovation spaces with companies increasingly focused on deploying this capital towards R&D
- Highly specialised:
Specific technical skills with operating teams and specific structural requirements to cater to the research and innovation needs of the life sciences industry, creating a high barrier for entry compared to traditional commercial or industrial real estate
- High tenant stickiness:
Driven by high initial capex by tenants on occupied spaces. - Higher Net Operating Income growth:
In 2021, lab rents in the US saw an increase of 11% vs 2% in offices.
(Source: CBRE, April 2022)
- Cluster Based Supply:
Supply is driven by location with presence of talent, investments, institutions, and favourable government policies.
Investors
Ivanhoé Cambridge invests internationally alongside strategic partners and major real estate funds that are leaders in their markets. Through subsidiaries and partnerships, the Company holds interests in more than 1,100 buildings, primarily in the industrial and logistics, office, residential and retail sectors. Ivanhoé Cambridge held C$60.4 billion in real estate assets as at December 31, 2020 and is a real estate subsidiary of the Caisse de dépôt et placement du Québec (cdpq.com), one of Canada’s leading institutional fund managers.Ivanhoé Cambridge develops and invests in high-quality real estate properties, projects and companies that are shaping the urban fabric in dynamic cities around the world. It does so responsibly, with a view to generate long-term performance. Ivanhoé Cambridge is committed to creating living spaces that foster the well-being of people and communities, while reducing its environmental footprint.
Lighthouse Canton is a global investment institution with Asset and Wealth Management services.We invest on behalf of our accredited investors, including private clients and some of the world’s largest institutional investors, such as pension funds, sovereign funds, and insurance companies, to drive economic and sustainable impact. Our responsible, diversified investment strategies allow our investors to benefit from differentiated growth opportunities across all market cycles, focusing on capital preservation and attractive risk-adjusted returns. As a global investment company, we have teams in Singapore, Dubai, and India. We drive value creation by applying high-quality processes and superior governance standards along with a robust risk management framework.Lighthouse Canton has successfully created a strong track record of generating superior risk-adjusted returns across fund strategies in real estate private equity, direct lending, public equities, global macros and other asset classes.
