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The European life sciences sector continues to expand. Driven by technological breakthroughs in AI-assisted drug discovery, personalized medicine, cell and gene therapies, and digital health solutions, the industry is increasingly becoming a strategic growth driver for economies and real estate markets. This is the conclusion of the current report "European Life Sciences Ecosystems: Sector Guide 2026" by the global real estate service provider CBRE, which is available here on the CBRE website.
Europe now boasts 43 of the world's top 100 life sciences universities and benefits from a strong research environment and substantial funding, including an EU-wide research and innovation budget of €93.5 billion. There is also positive momentum on the financing side: The venture capital volume in the European healthcare and life sciences sector rose to 13.22 billion euros in 2025 – an increase of 2.8 percent compared to the previous year. At the same time, the number of university spin-offs is growing. European deep tech and life sciences spin-offs are now valued at around $398 billion and employ more than 167,000 people in over 7,300 companies.
This dynamic is increasingly reflected in the real estate market. New specialized laboratory and R&D space is being created in established clusters such as Cambridge, London, Paris, Copenhagen, Basel and Zurich, as well as in up-and-coming locations. The demand for flexibly usable, technically highly equipped real estate is increasing significantly – especially in urban science districts with close links between research, clinics and industry.
"The European life sciences sector is increasingly evolving beyond its status as a niche market and is gaining strategic importance. For real estate investors, this is a specialized asset class that convinces with long-term stable demand and attractive value creation potential," says Dr. Jan Linsin, Head of Research at CBRE in Germany.
The so-called "lab premium" effect remains a defining market feature: laboratory space achieves significant rent premiums compared to traditional office space. This is due to higher construction and operating costs, complex technical requirements and a structurally limited supply in central locations. At the same time, the investment market is becoming more professional, as institutional investors are making targeted investments in specialized life sciences products.
Germany plays a key role in a European comparison. Berlin and Munich in particular have established themselves as leading innovation locations.
Berlin benefits from a distinctive start-up culture, a strong university research landscape and internationally visible institutions such as the Berlin Institute of Health @ Charité. The city accounts for the majority of Germany's venture capital volume in the life sciences sector. "There is a clear trend towards urbanization: In order to survive in the competition for highly qualified talent, companies are increasingly demanding locations in central city center locations. In addition to established clusters in Adlershof, in the southwest of Berlin and in Potsdam, new, inner-city project developments underline the growing importance of specialized laboratory properties," says Matthias Mohr, Team Leader Valuation Advisory Services at CBRE in Berlin.
Munich is considered Germany's leading and largest biotechnology location with around 450 biotech and pharmaceutical companies. The ecosystem is supported by an excellent research and university landscape, including the Ludwig Maximilian University of Munich (LMU) and the Technical University of Munich (TUM), as well as institutions of the Helmholtz and Max Planck Societies. Locations in the southwest of Munich, such as Martinsried, and also in the north, such as Garching, are among the most important innovation centers in Europe. "Large financing rounds, new research and production centers and planned campus developments underline the long-term growth dynamics of the location," says Rainer Knapek, City Lead Munich at CBRE.
"Germany is playing an increasingly central role within Europe. Berlin convinces with its research strength and start-up dynamics, Munich with its industrial depth and international networking. Both markets benefit from an exceptionally strong innovation pipeline," explains Linsin.
"The need for highly specialized laboratory and R&D space will continue to grow. Those locations that strategically combine scientific excellence, access to capital and suitable real estate products will be successful," says Linsin.
