Defence Sector is Opening Up Strategic, Long Term Real Estate Opportunities Says Cushman & Wakefield Report

London, 1 Oct 2025 – Europe’s push for greater defensive capabilities, economic resilience and technological sovereignty is fuelling demand for industrial real estate across strategic sectors according to a new report from Cushman & Wakefield.  

In ‘Strategic Sector Signals’, Cushman & Wakefield outlines the growing demand for industrial and logistics real estate across Europe from strategic sectors including defence, clean energy technology, critical materials and life sciences.  

The Defence sector is leading this expansion, with huge increases in public defence spending accompanied by binding targets for procurement of European-made products. These public policy shifts are driving significant uplift in demand for industrial space from Defence companies. Supply is being achieved in a variety of ways. Of the new manufacturing facilities announced or opened since the beginning of 2024, 54% have been created as extensions to existing sites, reflecting the urgency and scale of investment. Another 16% are being accommodated in existing buildings which are being repurposed or refurbished for new uses and 26% as new buildings. 

Many recent Defence investments have been in established locations where there are already existing capabilities such as clusters in France, the UK, Germany, Italy, Spain and Sweden. New areas of focus are also developing in Central & Eastern Europe, where countries such as Poland and Romania are emerging as key defensive hubs since the Russian invasion of Ukraine. In addition to new production facilities, logistics spaces are required for moving goods into and around Europe and beyond, especially on major transport corridors and at major ports.  

Sally Bruer, Head of EMEA Logistics & Industrial and Retail Research at Cushman & Wakefield, said: “The scale and speed of investment in defence manufacturing means there are immediate and growing needs for industrial and logistics property solutions. Real estate strategies must factor in enhanced security, regulatory scrutiny and long-term asset control. Extensions are proving to be the fastest route to scale, but new builds and conversions are also forming part of real estate solutions for manufacturers to grow.” 

Clean Energy Technology is also seeing significant growth in demand for industrial space, driven by the EU’s Net-Zero Industry Act and the UK’s Clean Energy Sector Plan. Focusing on key sub-sectors – such as solar PVs, wind power technology and small modular nuclear reactors – highlights significant differences in commercial realities between market segments of clean energy equipment production. Real estate requirements range from bespoke owner-occupied buildings for specialist production to conventional leased assets for assembly and logistics. Location decisions are largely driven by proximity to transport links, access to skilled labour, and the benefits of clustering within established manufacturing hubs. Germany dominates this sector with around half the EU’s manufacturing capacity for both wind and solar, with strong capacities in the UK, Italy, France, Spain and parts of the Nordics and CEE. 

The Critical Materials sector is responding to rising demand for strategic resources – such as nickel, lithium and rare earth elements – to produce key technologies. The EU’s Critical Raw Materials Act and the UK’s forthcoming Critical Minerals strategy aim to secure domestic supply as demand grows. Mining and refining facilities are typically owner-occupied, while recycling operations offer opportunities for leased conventional industrial space, particularly near manufacturing hubs. 

Life Sciences continues to be a priority for both the EU and the UK, with strategies focused on research, manufacturing and supply chain resilience. However, uncertainty around tariffs in the U.S. market is prompting cautious investment decisions, albeit relocating pharmaceutical production is not a decision businesses will take lightly due to high costs and regulatory complexity. Real estate requirements include Good Manufacturing Practices-compliant production facilities, often owner-occupied alongside Good Distribution Practices-compliant logistics centres, which are typically leased. Investment will likely focus on existing life sciences manufacturing clusters and key transport gateways close to these hubs. 

Tim Crighton, Head of EMEA Logistics & Industrial at Cushman & Wakefield, said: “Strategic sectors are bringing opportunities across the spectrum of industrial real estate, both owned and leased. Strategic sector operators looking to grow or transform their businesses will need to consider their real estate strategies carefully, including working with landlords for asset enhancement. Investors and developers who understand the nuances of each sector, from compliance to clustering, will be best placed to unlock long-term value.”