Savills: UK Defence Investment Plan to drive demand for logistics and offices

Savills has released its initial commentary regarding the potential impact of the UK Government’s Defence Investment Plan on the property sector.

Robert Pearson

According to Robert Pearson, director at Savills, the increase in defence spending is set to drive substantial demand for advanced manufacturing, secure logistics, R&D, office, and supply chain infrastructure. Achieving military objectives relies heavily on securing specialised, power-enabled, and highly resilient spaces with strict operational security.

Savills estimates that boosted spending could generate up to 3 million m2 of new UK industrial and logistics demand over the next seven years—a scale comparable to the annual warehousing footprint of the entire high street retail sector. Furthermore, an estimated 243,000 m2 of office and R&D space will be required by 2033 to accommodate roughly 12,600 new technical and administrative roles.

The primary hurdle will be the speed of execution. To successfully translate funding into operational capability, government policy must align with planning systems, grid capacity, land availability, and regional skills. Locations that can offer secure, infrastructure-ready land quickly will benefit the most.

Growth will not be uniform as demand will heavily concentrate around established aerospace, defence, advanced manufacturing, and tech clusters that already offer skilled talent, transport links, and robust power grids.

Continental European trends indicate that defence-related occupiers (such as drone technology, aerospace, and secure logistics) are already becoming primary growth drivers.

Due to strict security clearances and rigid operational restrictions, not all landlords or traditional real estate assets will be positioned to capture this rising demand.