Investors in Asia Pacific had limited recognition of the life sciences sector as a real estate investment opportunity in the past. However, the COVID-19 pandemic spurred renewed interest from governments in different countries to acknowledge its growth potential. South Korea designated the life sciences sector as a core industry, ensuring support for life sciences clusters through funding and favourable tax policies.

The landscape of Korea’s life sciences clusters

Life sciences clusters gather related ventures, research institutes, universities, and investors in a specific region, focusing on advancements in life sciences technology. Given the high R&D costs and time constraints, a collaborative environment to share risks is crucial. Currently, Korea boasts over 20 life sciences clusters nationwide. High-tech medical complexes in Daegu, initiated by the national government in the late 1990s, encouraged the creation of regional clusters. Recently, biotech ventures have gravitated to cities near Seoul for their proximity to the capital and competitive infrastructure. Meanwhile, the Korean investment market faces challenges amid financial volatility, particularly impacting the life sciences sector due to its inherent high risks. Therefore, the effectiveness of clusters as a spatial strategy to mitigate risks and revive the frozen bio-investment market through collaboration remains to be explored.

Figure 1: Location of major life sciences clusters in Korea

Source: JLL Research

Major life sciences clusters in Korea

A thriving life sciences cluster relies on being situated in an innovative city with strong consumer demand. Due to their rich talent pool, presence of academic institutions and sufficient funding, the following clusters have garnered attention as appealing destinations for life sciences companies seeking office space.

1. Seoul Bio-hub

Inspired by the life sciences cluster in Boston, Seoul Bio-hub stands out with over 140 venture companies, research institutes, and 5,200 doctoral-level personnel. Its strategic location near renowned universities and hospitals further enhances its appeal. The hub benefits from prime infrastructure in Seoul for attracting intellectual talent.

2. Songdo International Business District

Songdo IBD in Incheon is emerging as a leading life sciences cluster in Korea, set to welcome the SK Bioscience R&D Centre in 2025 and already housing major biopharmaceutical production facilities like Samsung Biologics and Celltrion. Meanwhile, Incheon City has attracted the K-Bio Lab Hub, funded with KRW 250 billion of state aid (Ministry of SMEs and Startups, 2021), to Songdo.

3. Pangyo Techno Valley and Gwang-gyo Techno Valley

Pangyo Techno Valley and Gwang-gyo Techno Valley, with excellent transport links to Seoul, have become preferred destinations for biotech and pharma companies. For instance, Huons Global, one of Korea’s major pharmaceutical companies, occupies a significant portion of I-Square in PTV 2.

Figure 2: Key life sciences clusters in Korea

Source: KHIDI, Jan 2023

Outlook

South Korea’s developed life sciences market, supported by high healthcare spending per capita and mature healthcare infrastructure, holds promising potential as the ageing population and life expectancy domestically grow. However, the government must persistently strategise a differentiation plan aligned with international standards to overcome previous sporadic cluster formation. With the government’s increasing support, it is also crucial to observe whether the development of scientific, intellectual properties will truly invigorate the Korean investment market or remain a mere political display.

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