Patrizia: Defence spending fuels European smart logistics boom

Increased defence spending in Europe is expected to revitalise the "Smart Logistics" real estate market, according to research by Patrizia. 

Maasvlakte - Patrizia

This surge is driven by NATO's commitment to higher defence investment, with a portion allocated to critical infrastructure and strengthening the military-industrial base.
Despite a recent decline in overall industrial real estate demand, investor confidence in logistics assets remains strong. 
New logistics investment will be concentrated in:
Winning Clusters: Areas with specialised labour and R&D in defence manufacturing, such as Munich, Paris, Toulouse, the Netherlands, Italy, and Prague.
Concentrated Demand: "Asset light" defence companies like Safran, Thales, Rheinmetall, and BA Systems are seeking real estate partners for expansion.
Tailored Facilities: The need for high-specification "mid-box" and bespoke sites for military logistics and production, with an expected increase in sale-and-leasebacks.
Stable Lease Structures: More "net lease" agreements to provide better cash flow visibility for manufacturers with long-term capital investments.
This "defence logistics megatrend" will require smart logistics assets with digital automation, AI-assisted tracking, and secure supply chains utilising blockchain. Last-mile logistics hubs will become crucial for rapid delivery and strategic stockpiling.
The European energy transition also contributes to this demand, with logistics hubs needed near energy corridors (e.g., hydrogen infrastructure in Germany and the Netherlands). These developments will also need to consider proximity to a workforce, potentially leading to the creation of housing around logistics parks.
Key European locations poised for significant logistics defence investment include:
Eastern Europe and NATO border countries: Requiring logistics assets near military bases and transport corridors, such as smart warehouses in Poland.
Cities with strong industrial bases, like Munich, benefit from robotic-enabled warehouses supporting aerospace supply chains.
Energy corridors and ports: Strategic hubs for LNG and renewable energy, such as Rotterdam, will require advanced storage and distribution facilities.
Speaking at MIPIM 2026 in Cannes, Emile Poort, Patrizia's head of Investment Management Logistics, said: “The tailwinds are blowing favourably towards a strong military manufacturing revival, and we believe this will boost demand for ‘smart logistics’ assets around defence company clusters and associated infrastructure across Europe, driving a sustained upturn in investment.”