Demand jumps for lab space in Montreal

MONTREAL • White coats are back.

Demand for laboratory space in the greater Montreal area is soaring as a new generation of biotech and life sciences companies — along with established heavyweights — looks to ramp up research and development efforts here, industry experts say. Foreign investment projects in life sciences and health technologies more than doubled last year compared with 2020, said Stéphanie Doyle, a director of business development at Montreal International who focuses on the sector.

Biologics products maker Biodextris is busy converting a Laval office building into a 26,000-square-foot laboratory. Laval-based biotech company Inixium, meanwhile, recently moved into a former barn transformed into a 7,000-square-foot facility equipped with cutting-edge electromechanical systems.

“The activity level is the busiest we’ve seen in decades,” said Jeremy Kenemy, life sciences team leader in the Montreal office of U.s.based broker CBRE Ltd. “There’s a lot of money being injected into the space. The biggest challenge is that there isn’t enough lab space that’s ready to go.”

Demand for lab space in Greater Montreal currently exceeds 2 million square feet, said Kenemy, a 20-year industry veteran. Dedicated buildings, such as the National Research Council or St-laurent’s Montreal Innovation Centre, are “jammed full,” he said.

With about 1,000 companies and 46,000 employees, Quebec is one of North America’s biggest life sciences hubs. About 80 per cent of the province’s industry is based in Greater Montreal.

COVID-19 “has given the life sciences sector fresh momentum,” said Montreal International’s Doyle. New investment projects currently revolve around three main areas: bio-fabrication, medical technology and artificial intelligence for health, she said.

“There’s a lot of effervescence,” Doyle said. “The federal government has put in place new funds to stimulate bio-fabrication. Quebec, too, is eager to invest in new projects.”

While pharmaceutical giants such as Glaxosmithkline and Merck shut their Montreal-area R&D facilities over the past two decades to outsource the work elsewhere, new players have increasingly picked up the slack. They include oncology company Repare Therapeutics, which completed the largest initial public offering for a Canadian biotech firm in 2020 when it raised US$253 million on the Nasdaq market.

To meet the demand, several property owners have begun turning office buildings into laboratories. Recent examples include Alexandria Real Estate, North America’s biggest lab owner, which is converting space in Laval’s Biotech City into R&D facilities.