Future flows

Europe’s industrial and logistics landscape is being reshaped by two powerful forces: the rapid expansion of the defence industrial base and the growing presence of Chinese businesses investing directly in European markets.

Both are structural shifts, not short-term trends. Rising defence requirements are driving manufacturers to increase production capacity, while competitive domestic pressures are pushing Chinese businesses to establish manufacturing, distribution and logistics operations closer to European customers. Together, they are creating new sources of demand and new opportunities for industrial real estate.

Why does this matter now?

The forces highlighted in our previous Strategic Sector Signals research have intensified.

European governments are spending more on defence and placing greater emphasis on strengthening domestic production capacity. At the same time, Chinese manufacturers, retailers and logistics businesses are moving beyond exporting into Europe towards establishing a permanent operational presence within the region.

For occupiers, landlords, developers and investors, that means demand is evolving in both scale and type. Specialist production facilities will be part of the story, but so too will conventional industrial buildings, modern logistics facilities, converted legacy assets and, increasingly, smaller flexible units.