British Land rows back on life sciences vision for 3XN's £600m Euston Tower overhaul

British Land has rowed back on plans to position its £600m Euston Tower overhaul as laboratory-enabled office space in the latest sign of a downturn in the life sciences market.

The developer asked Camden council last month to remove a planning obligation requiring a minimum of 16,500sq m of the 31-storey tower’s floorspace to be restricted to scientific, technological and educational activities.

It is said to have submitted the deed of variation application, approved by Camden council on Monday, in order to “ensure the building is more attractive to investors and occupiers”.

The 3XN-designed transformation of the vacant 1970s tower, approved last year with Mace on board as main contractor, is set to strip the building stripped back to its core and increase its size from 320,000 sq ft to 500,000 sq ft.

British Land unveils its plans for the site in 2023, pledging to transform the building into a “world-class net zero home for world-leading life science and innovation occupiers”.

The scheme’s section 106 agreement included a clause requiring around a third of its floorspace to be delivered for “Knowledge Quarter uses”, which include businesses working in the academic, research, innovation, technology sectors.

But in a letter to the council on 17 March the developer asked for the clause to be remove “in its entirety”, saying market conditions for these uses had become “uncertain” due to a “fast moving and fluctuating economic climate”.

It highlighted the decision of US pharmaceuticals giant MSD to withdraw from a £120m AHMM-designed life sciences scheme in King’s Cross, which is being built by Mace with Sisk completing fit-out work, as an example of the “volatile nature of this market”.

“Flexibility to respond to occupational demand is essential to ensure the proposals are able to adapt to changing market conditions and remain viable, investible and capable of being fully let in the future,” British Land said.

It added that its vision to deliver a “world-leading” life sciences workplace “remains unchanged” but that its current objective was to ensure that all floors within the proposed building are occupied.

Life sciences was one of the fastest growing occupier sectors in the years immediately after the covid pandemic with developers turning to the market following a slump in demand for traditional office space due to staff working from home.

But demand for so-called ‘lab-enabled’ floorspace has failed to keep up with supply with more than a quarter of Oxfordshire’s laboratory space standing empty at the end of last year, according to a report by Bidwells in February.

The study found the vacancy rate for laboratories was 27% amid “subdued” market conditions caused partly by a collapse in venture capital funding for start-ups, with the vacancy rate set to rise this year as more schemes complete.

British Land has been contacted for comment.