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The Crown Estate is converting a department store building in central Oxford into a laboratory space, as the British monarchy’s property group launches a £1.5bn science and technology investment strategy.
The £16bn property group, which manages the Crown’s historic land portfolio, will invest £125mn to buy and redevelop the former Debenhams site in the heart of central Oxford. The store closed in 2021 after the retailer collapsed during the Covid-19 pandemic.
Crown Estate chief executive Dan Labbad told the Financial Times the redevelopment of the building, and the estate’s new sciences strategy, was designed to address a shortage of good lab space and specialised real estate for start-ups, and help persuade such companies to stay in the UK. It is planning to invest £1.5bn in similar projects over the next 10-15 years.
Britain’s lack of homegrown technology companies has risen up the agenda for policymakers in recent years, with chancellor Jeremy Hunt last week saying he wanted to see the creation of a $1tn British tech giant to rival Microsoft or Google.
“At the moment, there is not enough space. We are not serving these customers well,” Labbad said. “They will go elsewhere. They are going elsewhere. The idea here is to make sure [start-ups] are choosing the UK and not the US or other places.”
The project will be part of a new partnership announced on Wednesday between the Crown Estate, Pioneer Group, a specialist property firm focused on labs, and Oxford Science Enterprises, a venture capital group that seeks to commercialise the university’s research.
The partnership comes at a time when many property investors are rushing to capitalise on demand for lab space, with many repurposing out of favour retail or office buildings, particularly in London and around Oxford and Cambridge universities.
Labbad said the science strategy formed part of a wider move by the Crown Estate to diversify into higher-growth areas beyond its core holdings of rural land and central London property along Regent Street.
The estate has enjoyed a windfall from its ownership of the seabed surrounding Britain up to 12 nautical miles and rights over offshore energy, due to lucrative licensing agreements for wind farms. The property group, which runs independently of the government and royal household, pays its profits into the UK Treasury — with a percentage then allocated to the royal family.
Last year, the royal family agreed to reduce the percentage it receives — although the grant is set to rise in cash terms because of the Crown Estate’s bumper profits.
Labbad said the targeted investment into specialised real estate for high tech start-ups would be another growth area for the estate, while also serving the needs of UK entrepreneurs and regional economic development.
The Crown Estate has bought a long leasehold of the Oxford Debenhams from freeholder DTZ Investors, who will keep the street level retail.
The project is subject to planning approval and could face opposition over the decision to convert a plum city centre building into labs and adjoining workspace. “We understand the sensitivity around this asset,” said Labbad, adding that the department store’s failure was “a market dynamic”.
The Crown Estate hopes construction will begin this year with the labs completed in 2027 or 2028. It is also an investor in the nearby Westgate shopping centre.
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