United Kingdom, Germany and France account for the largest share – Part 1 of Cushman & Wakefield’s “Future Flows” report
A wave of defence-related investments worth several hundred billion euros is increasingly reshaping the European industrial real estate market, according to a new study by Cushman & Wakefield. The latest report, “Future Flows: Global Dynamics & European Industrial Real Estate” identifies a total of 197 new industrial and manufacturing real estate projects in the defence sector across Europe between early 2024 and August 2026.
Defence “Turning Point”: New Projects Outnumber Expansions
Europe’s defence industry is undergoing a major transformation towards sustainable, high-volume production in a significantly more volatile environment. More than half of all recorded projects (54%) involve new facilities, of which over 36% are greenfield developments and more than 17% involve the acquisition, leasing or conversion of existing buildings. The remaining 46% relate to the expansion of existing production sites.
More Than 40% of Projects Concentrated in the UK, Germany and France
The United Kingdom, Germany and France have attracted the largest number of new investment commitments, reinforcing their position as Europe’s leading defence manufacturing markets. Together, these three countries account for more than 80 projects, representing over 40% of all projects recorded since early 2024.
In Germany alone, the study identified 27 projects across various defence subsectors:
- 5 projects in artillery and ammunition
- 4 projects in aerospace and naval systems
- 4 projects in systems and components
- 3 projects in drones and autonomous vehicles
- 3 projects in military vehicles
- 3 projects in weapons systems
- 5 projects in other defence-related categories
These include several projects by major industry players such as Rheinmetall, KNDS, Thales Group, CSG, Diehl and Quantum, among others.
Among the remaining 21 countries covered by the study, Spain, Poland, Italy, Sweden, Turkey, Belgium and the Netherlands also recorded notable project activity, each with its own sector focus.
“What distinguishes the current cycle from previous ones is that demand is no longer limited to a small number of major defence contractors. As large-scale defence programmes move into production, we expect activity to spread across a much broader supply chain.” Sally Bruer, Head of EMEA Logistics & Industrial Research, Cushman & Wakefield
Around 500,000 sq m of Space Announced in Germany Since 2024
According to Cushman & Wakefield’s research, the most commonly sought facility size within the defence sector ranges between 10,000 and 25,000 sq m, while new developments average approximately 20,000 sq m.
“Based on our research, 27 projects have been announced in Germany, representing approximately 500,000 sq m of manufacturing and logistics space,” said Rainer Koepke, Head of Logistics & Industrial Agency Germany.
He added:
“A large share of demand comes from owner-occupiers in manufacturing. In selected cases, we are also seeing interest in build-to-suit leased facilities, particularly for less sensitive products. Existing buildings, including speculative developments and properties becoming available from the automotive sector, are also attracting interest.”
Study Conclusion: Defence Will Remain a Key Factor in the Industrial Real Estate Market
Significantly higher defence spending is already translating into increased demand for industrial real estate. According to Cushman & Wakefield, these investments are driven by the need to strengthen national and allied defence capabilities.
At the same time, a coordinated European effort to source products and materials from within Europe is supporting greater self-sufficiency, stronger supply-chain resilience and long-term economic growth. A substantial share of demand can be accommodated within existing industrial property stock, creating opportunities for both new developments and the repositioning of existing industrial and logistics assets.
As a result, the study concludes that further positive impacts on European industrial real estate markets can be expected.
Note: Part 2 of Cushman & Wakefield’s current “Future Flows” study examines the role of Chinese occupiers in the European logistics leasing market
