To be sure, recovery in leasing and investment activity in China’s life sciences sector remains significantly below the peak levels observed during the pandemic. But a major development fuelling investor optimism is the slew of impending drug patent expirations, an enticing opportunity for those seeking to enter the sector.

“With many branded drug patents approaching patent expiry in the next few years, Chinese pharmaceutical companies and contract development manufacturing organisations (CDMOs) are likely to capitalise on this opportunity through the production of generic medicines,” says Colin Bridge, Director, Industries Research, Asia Pacific, JLL.

“They’ll be looking to leverage their extensive manufacturing capabilities and strong innovation ecosystem to create these drugs as soon as possible and release them to the market,” he says.

Against other life sciences manufacturing powerhouses like Hyderabad and Bangalore, Shanghai has the added advantage of a sizeable life sciences talent pool. 

The presence of leading life science clusters hosting a range of multinational companies and a vibrant start-up community is an attractive proposition for those looking to pursue a career in the industry.

Government policies and incentives, specifically designed to lure life science professionals, are also making inroads into reversing the ‘brain drain’ phenomenon by attracting top talent abroad back to China, Bridge adds.

“Most public hospitals in China are affiliated to the top universities, which produce a steady stream of life sciences talent,” Ding says.

For the universities, close collaboration with the hospitals provides the professors and professionals with a direct resource for conducting clinical trials of new patents and drugs. “This collaboration allows for the effective translation of research findings into practical applications, benefitting both academia and the healthcare industry,” says Ding.

Another major draw for life sciences investors has been the fast-developing market for China’s real estate investment trusts (C-REITs), which primarily include underlying assets including industrial parks, warehouses, and rental housing.

“C-REITs provide an alternative avenue for investors looking to divest stabilised assets to raise capital,” says Ding.

First launched in 2021, the broadening C-REIT scheme now offers life sciences investors a new exit strategy to sell their business park assets on public markets.

In November, China’s securities regulator further expanded the range of sectors with its approval of new C-REITs covering retail properties.