AI and Venture Capital Fueling Surge in Demand for Next-Generation Labs

Artificial intelligence (AI) is fundamentally altering the design and function of life sciences lab spaces, driving demand for next-generation facilities that blend traditional wet labs with environments fit for digital research. This transformation is highlighted in JLL’s 2025 EMEA Life Sciences Industry Perspective and Cluster Report.

The report found that AI is driving a shift in life sciences real estate. Lab spaces are having to evolve to accommodate hybrid research models, necessitating flexible units that seamlessly integrate wet labs (for biological experiments) and dry labs (for data analysis and computational work). The shift reflects the growing convergence of biology and data science, as AI brings hopes of reducing drug development timelines and costs.

This transformation is being fueled by record investment. In 2024, there were 100 deals and more than $500 million invested by Venture Capital (VC) targeting life sciences companies specialising in AI in Europe. More widely, the momentum is continuing in 2025, with overall European life sciences VC investment reaching €3.8 billion in Q1 – the highest first-quarter total ever recorded for the broader life sciences sector.

George Beaton, EMEA Life Sciences Research Lead, JLL commented: “The life sciences real estate market is poised for significant long-term expansion, driven by the intensifying role of AI in lab efficiency and drug discovery. AI is no longer just a tool; it's a catalyst for a new type of lab – one that is inherently more digital, collaborative, and adaptable.” 

Life sciences companies are often grouped together in geographical clusters to allow them to access research institutions, talent, and other supporting businesses. The report analysed these clusters and found that they can be broken down into three key areas: 

• Biopharma R&D (led by UK's Golden Triangle and Paris)
• Digital Health/Tech R&D (top clusters in London and Berlin)
• Pharmaceutical Manufacturing (Dublin and Medicon Valley dominating)
   

Stockholm-Uppsala, Medicon Valley and Munich emerged as the only clusters ranking top-tier across all categories, showcasing uniquely balanced ecosystems. These findings highlight how real estate needs vary significantly by specialisation - from lab-intensive biopharma spaces to tech-friendly offices for digital health.

The increasing demand for modern, tech-enabled labs – plus the fact that demand is often concentrated in these clusters - is creating a shortage of suitable properties across EMEA. Private lab stock in Berlin, Paris, and London remains scarce, though pipelines could double inventory in the next five years. Projects under construction across six major European hubs represent over 27% of the existing supply.

“The VC rebound underscores investor confidence in life sciences, but the nature of funding has changed,” Beaton added “Capital is increasingly concentrated in mature scale-ups rather than early-stage startups, which means real estate demand is becoming more targeted. Prime locations with strong talent pools and existing lab infrastructure are set up to benefit the most.”