Cushman & Wakefield’s latest life sciences market report External Link breaks down the major trends shaping the industry, from resurgent capital markets and accelerated dealmaking to how real estate is performing across established hubs and fast-growing emerging markets.
Pharma and biotech companies significantly ramped up dealmaking in the first half of 2026, with M&A volume nearly tripling year-over-year (YOY) to $97.2 billion, and partnership activity climbing 18% to $108 billion. After several muted years, the IPO market roared back with $6.8 billion in offerings, while funding for AI-driven drug discovery surged 49% to $7.8 billion, underscoring investors' growing conviction in the sector’s next wave of innovation.
Real estate fundamentals are beginning to reflect this improvement, even as the market continues working through excess supply. Global lab and cGMP rents softened modestly, down 0.5% YOY, and vacancy climbed to 24.2% as newly delivered space came online. However, the pace of vacancy growth is decelerating, and construction pipelines have contracted sharply across most major markets—signaling the sector may be approaching peak vacancy.
Capital markets told a similarly encouraging story. Global R&D investment sales reached $13.2 billion, up 2% YOY, while venture capital (VC) funding jumped 30% to $29.9 billion, its strongest first-half showing since 2022. The U.S. saw even sharper gains, with VC funding up 37% and IPO volume up 232% YOY. Europe's recovery gained traction as well, aided by improving debt markets, growing M&A activity, and expanding public sector innovation funding, while the Chinese mainland continued advancing up the global value chain through record licensing activity.
Looking ahead, the life sciences real estate sector still faces headwinds—elevated vacancy, cautious tenant demand in some markets, and a more selective funding environment for early-stage companies. But with capital markets rebounding, clinical trial activity expanding and construction pipelines thinning, the industry is well positioned for a constructive second half of 2026 and beyond.
