The mandate of a German institutional investor requires the investment goals of stability with low risk, attractive running cash return, and upside potential. Especially in the current market phase, these parameters are difficult to combine. It takes an eye for and experience in niche strategies to be successful.
GalCap Europe identified the BioTech & Life Science sector as a very attractive niche several years ago and was one of the first asset managers to invest there. Life science real estate is a very specialised asset class where one has to understand the requirements of the users even more precisely than in classical types of real estate. The investment risk is not necessarily higher than in other segments, but it shows a different profile. Networking and cooperation with other companies is essential for the users of life science properties. Therefore, some research clusters have formed where these companies like to locate. There is a lively demand for laboratory space here, which in turn is important from an investment perspective. The demand for suitable real estate is growing and the supply is limited.
Already in 2018, GalCap Europe acquired a portfolio of two life science properties: Vienna BioCenter II and Vienna Competence Center. The micro locations of both properties are excellent for their use. On the one hand, Vienna BioCenter campus, where around 2,100 researchers and students are active in around 20 institutions and companies on approx. 90,000 m² of space. On the other hand, in the case of Vienna Competence Center, the immediate proximity to the Vienna General Hospital (AKH), the largest university hospital in Austria and one of the largest hospitals in Europe. Both properties are fully leased to research-related occupiers and benefit from extraordinarily loyal tenants. In this case, short remaining lease terms and indefinite lease contracts are considered manageable risks, mitigated by GalCap Europe’s active asset management.
Our activities in the Life Science segment are being continuously expanded: for example, by the acquisition of Space One, the largest technology park in Graz. Space One not only provides stable cash flow, but also a variety of opportunities for further expansion and development. GalCap will be able to fully exploit its active management approach here.
There is high potential in the future-proof market of BioTech & Life Science. The global pandemic has brought it into the investor’s spotlight. GalCap Europe can draw on vast expertise in this area and has established itself as a leading specialist in this asset class, where specific know-how is the key to success.