In the “Strategic Sector Signals” study, Cushman & Wakefield outlines the growing demand for industrial and logistics properties across Europe from strategic sectors including defense, clean energy technology, critical materials, and life sciences.
The defense sector is leading this expansion, driven by significant increases in public investment and binding targets favoring the acquisition of products manufactured in Europe. These policy changes are fueling a sharp rise in demand for industrial space from defense companies. Supply is being met in various ways. Of the new manufacturing facilities announced or inaugurated since early 2024, 54% are expansions of existing units — reflecting the urgency and scale of investments. Another 16% are being installed in pre-existing buildings, adapted or refurbished for new uses, while 26% are being built from scratch.
Much of the recent investment in defense has been directed toward established locations with consolidated capabilities, such as existing clusters in France, the UK, Germany, Italy, Spain, and Sweden. At the same time, new strategic zones are emerging in Central and Eastern Europe, with countries like Poland and Romania establishing themselves as key defense hubs since Russia’s invasion of Ukraine.
Beyond the construction of new production units, there is a growing need for logistics infrastructure to enable efficient transport of goods within and outside Europe — especially along major transport corridors and in large European ports.
Sally Bruer, Head of EMEA Logistics & Industrial and Retail Research at Cushman & Wakefield, stated: “The scale and speed of investment in the defense industry mean there are immediate and growing needs for industrial and logistics real estate solutions. Real estate strategies must consider enhanced security, regulatory scrutiny, and long-term asset control. Expansions are proving to be the fastest path to growth, but new builds and conversions are also part of the real estate solutions for manufacturers’ expansion.”
Clean energy technology is also seeing strong growth in demand for industrial space, driven by initiatives such as the EU’s Net-Zero Industry Act and the UK’s Clean Energy Sector Plan. The focus on strategic subsectors — such as photovoltaic solar energy, wind technology, and small modular nuclear reactors — reveals significant differences in business dynamics across segments of clean energy equipment production.
Real estate needs range from custom-built facilities occupied by manufacturers for specialized production to conventional leased assets for assembly and logistics operations. Location decisions are heavily influenced by proximity to transport infrastructure, access to skilled labor, and the benefits of clustering in established industrial hubs. Germany leads this sector, concentrating around half of the EU’s production capacity in both solar and wind energy. The UK, Italy, France, Spain, Nordic countries, and several regions in Central and Eastern Europe also have significant capabilities in this domain.
The critical materials sector is responding to growing demand for strategic resources — such as nickel, lithium, and rare earth elements — essential for manufacturing advanced technologies. The EU’s Critical Raw Materials Act and the UK’s upcoming Critical Minerals Strategy aim to ensure domestic supply at a time of rising demand. Mining and refining facilities are generally owner-occupied, while recycling activities open opportunities for leasing conventional industrial spaces, especially near production centers.
Life sciences remain a priority for both the EU and the UK, with strategies focused on research, production, and supply chain resilience. Despite uncertainty around tariffs in the North American market leading to more cautious investment decisions, the relocation of pharmaceutical production remains complex due to high costs and stringent regulation. Real estate needs include production facilities compliant with Good Manufacturing Practices, typically owner-occupied, and logistics centers meeting Good Distribution Practices, usually leased. Investment is expected to continue concentrating in established industrial clusters and nearby logistics corridors.
According to Sérgio Nunes, Partner and Head of Industrial & Logistics at Cushman & Wakefield in Portugal: “Portugal, thanks to its geostrategic location and exceptional climate conditions, brings together all the factors to establish itself as a strategic point in the European Union, playing a central role in high-value-added sectors. The country is already making significant progress in clean energy technology and the utilization of critical materials — key areas for the energy transition and European strategic autonomy.”
