Cambridge continues to be one of the most valuable life sciences locations globally, combining academic excellence, clinical infrastructure, investment capital and a dense network of specialist suppliers. As the sector enters 2026, however, the basis on which companies select laboratory space has become markedly more rigorous. Life sciences companies are no longer evaluating laboratories solely on availability or headline rent. Instead, decisions are increasingly driven by a detailed assessment of lifetime cost, operational resilience and the financial implications of infrastructure choices.
Within this context, purpose built laboratories are becoming the preferred option for many Cambridge based companies. This preference reflects a clearer understanding of how hidden and retrospective costs can accumulate in repurposed property, and how those costs affect capital efficiency, runway and enterprise value.
The evolving financial lens on laboratory space
In earlier phases of the Cambridge life sciences ecosystem, speed of entry often outweighed long term optimisation. Repurposed offices, warehouses and light industrial buildings provided a pragmatic route to early experimentation. In 2026, the operating environment is different. Companies are larger, funding rounds are more scrutinised and investors expect management teams to demonstrate discipline in infrastructure decisions.
Laboratory real estate is now assessed as a long term operating platform rather than a short term solution. This has brought greater focus on total cost of ownership, including fit out, energy use, maintenance, compliance and the cost of disruption over time.
What distinguishes a purpose built laboratory economically
Purpose built laboratories are designed around scientific use from the outset. Structural capacity, ventilation systems, electrical distribution and waste routes are all configured to support laboratory activity without extensive modification. This alignment reduces uncertainty in both capital expenditure and operating expenditure.
By contrast, repurposed property typically requires layers of intervention to reach functional equivalence. While these interventions are often feasible, they introduce cost variables that can be difficult to fully predict at the outset.
Indicative hidden costs in repurposed laboratory buildings
The financial case for purpose built labs becomes clearer when examining typical cost categories that arise during and after conversion projects. The figures below are indicative and based on common industry benchmarks for Cambridge laboratory projects rather than worst case scenarios.
Mechanical and electrical upgrades
Office buildings are usually designed for electrical loads of approximately 25 to 40 watts per square metre. Research laboratories frequently require 80 to 120 watts per square metre, sometimes more for automation heavy or imaging intensive workflows.
In a repurposed 20,000 square foot building, upgrading incoming electrical capacity, transformers and distribution can add £50 to £100 per square foot in capital expenditure. This equates to £1 million to £2 million of additional cost that is rarely reflected in initial feasibility assessments.
Ventilation presents a similar challenge. Increasing air change rates, installing fume extraction and routing exhaust safely often requires new plant, roof penetrations and structural reinforcement. Retrospective ventilation upgrades commonly add £30 to £70 per square foot, depending on constraints.
Ceiling height and spatial inefficiency
Many repurposed buildings have insufficient ceiling height for modern laboratory services. Where ceiling voids are constrained, services must be routed creatively, reducing usable space or forcing equipment relocation.
The financial impact is often indirect. A laboratory that nominally offers 10,000 square feet may deliver only 8,500 square feet of efficient lab space after services are installed. At Cambridge laboratory rents, this loss of usable area can equate to £150,000 to £250,000 per year in effective rent inefficiency.
Compliance driven rework
As companies progress, regulatory expectations tend to increase. Activities that were initially classified as low risk may later require enhanced containment, segregation or monitoring.
In repurposed buildings, accommodating these changes can require reopening walls, rebalancing ventilation systems or adding secondary containment measures. It is not uncommon for such mid life upgrades to cost £250,000 to £500,000 for a single laboratory suite, excluding the cost of downtime.
Purpose built labs typically anticipate these scenarios through spare capacity and modular design, reducing the need for disruptive intervention.
Energy and operating cost premiums
Older or converted buildings often rely on less efficient plant and control strategies. Even where initial performance is acceptable, energy consumption per square metre is typically higher than in modern purpose built laboratories.
For a mid sized laboratory consuming an additional 100 kWh per square metre per year compared with a high performance building, the incremental energy cost can reach £50,000 to £100,000 annually at current commercial electricity prices. Over a ten year period, this represents £500,000 to £1 million in additional operating cost, before accounting for price volatility.
Maintenance and asset life
Repurposed buildings frequently combine new laboratory systems with older base building infrastructure. This mismatch can shorten asset life and increase maintenance requirements.
Indicative maintenance budgets for converted laboratory buildings are often 20 to 30 percent higher than for modern purpose built facilities. For a company spending £200,000 per year on facilities management, this differential represents £40,000 to £60,000 annually, or up to £600,000 over a ten year occupancy.
Programme delay and opportunity cost
Time is one of the most expensive variables in life sciences. Conversion projects often encounter unforeseen constraints that extend delivery programmes.
A three month delay to laboratory commissioning can have material financial consequences. For a company with a monthly burn rate of £500,000, this equates to £1.5 million of additional expenditure before productive work begins. While not always classified as a property cost, this opportunity cost directly affects runway and valuation.
Productivity and risk as financial variables
Beyond direct costs, laboratory performance influences productivity and risk. Environmental instability, equipment downtime or constrained layouts can slow experimentation and data generation.
While difficult to quantify precisely, even modest reductions in productivity can delay development milestones. In a venture backed context, a delayed data readout can affect funding terms or partnership timing, with financial consequences that exceed any initial rent saving.
Purpose built laboratories mitigate these risks by providing stable, predictable operating environments aligned with scientific workflows.
The role of science parks and integrated development
Many purpose built laboratories in Cambridge are delivered within science parks or integrated campuses. This context adds further economic value through shared infrastructure, coordinated energy management and consistent service standards.
Shared utilities and maintenance frameworks reduce duplication and allow costs to be spread across a wider occupier base. This can translate into lower service charges and more predictable operating budgets.
Science parks also support expansion without relocation, reducing the cost and disruption associated with growth.
SCSC as a contemporary reference point
South Cambridge Science Centre provides a useful reference for how purpose built laboratory development is responding to these financial considerations. The scheme has been designed specifically for laboratory occupiers, with infrastructure sized for scientific use rather than adapted from other asset classes.
For companies assessing total cost of ownership, the relevance of SCSC lies in its emphasis on efficient base build systems, modern energy strategy and flexibility over time. These characteristics directly address the cost categories that tend to escalate in repurposed property.
By reducing the likelihood of major retrospective upgrades and by supporting lower operating costs, developments of this type allow occupiers to allocate capital to science rather than infrastructure remediation.
A more disciplined approach to cost benefit analysis
In 2026, Cambridge life sciences companies are applying a more disciplined framework to laboratory decisions. This framework considers:
• Capital expenditure required to reach functional readiness
• Operating expenditure over a realistic occupancy period
• Cost of delay and disruption
• Scalability without reconfiguration
• Impact on productivity and governance
When these factors are modelled together, the financial logic of purpose built laboratories becomes clearer. Apparent savings in repurposed property often diminish once hidden and retrospective costs are accounted for.
Conclusion
The growing preference for purpose built laboratories in Cambridge reflects a maturing life sciences ecosystem that values predictability, efficiency and long term value. While repurposed buildings can still play a role, their financial profile is increasingly well understood, including the cumulative impact of upgrades, energy use and operational risk.
Purpose built laboratories offer a clearer cost trajectory and a stronger alignment with modern scientific practice. In an environment where capital discipline and execution certainty are paramount, this alignment is driving a strategic shift. Developments such as South Cambridge Science Centre exemplify how purpose built laboratory infrastructure is shaping the next phase of growth for Cambridge life sciences companies in 2026 and beyond.
