Life Science REIT reports fall in portfolio value amid strategic review

(Sharecast News) - Life Science REIT reported a 10.9% fall in the value of its portfolio during the first half of 2025 on Monday, amid ongoing uncertainty in the life sciences real estate market and slower-than-expected leasing activity. The London-listed real estate investment trust said its unaudited EPRA net tangible assets as at 30 June stood at £232.1m, or 66.3p per share, down from £260.4m, or 74.4p, at the end of 2024.

It said the decline in valuation was broadly consistent across the company's five assets, reflecting wider market pressures and outward yield movement, particularly for assets with existing vacancy.

The update came as it continued to evaluate its strategic options, including a possible managed wind-down or a sale.

Its board said it had received a "significant amount of interest" since launching the formal sale process in March, with certain parties granted access to due diligence materials and meetings with its investment adviser, Ironstone Asset Management.

At the same time, the board was also reviewing potential returns from an orderly asset disposal programme.

Operationally, Life Science REIT said it had made modest progress on leasing, with four new tenants signed in 2025, increasing contracted rent to £17.4m and occupancy to 85.1%, compared to £15.9m and 84.4% at the end of December.

Notable deals included a lease at Unit 9 of the Innovation Quarter at Oxford Technology Park (OTP) and the full letting of Rolling Stock Yard following an agreement with Wayve Technologies.

At OTP, the company said it had also agreed a redesign of the final development phase with its partner Oxtec.

Buildings 10 and 11 would now comprise seven smaller lab units rather than two large structures, to meet stronger demand for flexible space.

The change was expected to lift estimated rental value by £0.35m to £2.1m, although it would incur an additional £5m in development costs.

Planning would follow shortly, the board said, with construction to begin once permission was granted.

Elsewhere at OTP, construction of Buildings 6 and 7 completed in the first half, while Buildings 8 and 9 were nearing completion.

Work was also underway on a new café and amenity space, due to open early in the fourth quarter.

The company confirmed a minor technical breach of a bank covenant during the period, with the projected interest cover ratio at 193.1% versus the required 200%.

A waiver had been secured from lenders, who the firm said remained supportive of the business through the review process.

Life Science REIT said it opted not to implement additional hedging, citing the ongoing strategic review.

At 1145 BST, shares in Life Science REIT were down 7.11% at 40.5p.

Reporting by Josh White for Sharecast.com.