Defence offers new front for Britain's office landlords
XLRE•British property investors are targeting defence companies as rearmament spending boosts demand for offices and research space. Savills forecasts nearly 250,000 square metres of additional British office and R&D demand, alongside up to 3 million square metres of industrial and logistics demand.
1. New demand for offices
Defence technology firms working on areas such as drone programming and AI-enhanced cybersecurity are stimulating demand for city-centre offices and laboratories, as well as industrial sites. Knight Frank says firms increasingly want to be near British research universities to recruit specialised talent.
2. Canary Wharf opportunity
LS Estates is sounding out defence and AI companies for a refurbished nine-floor office in Canary Wharf, where a managed estate with its own security staff may appeal to defence occupiers. The £100 million-plus refit of 17 Columbus Courtyard was initially aimed at life sciences firms, but short-term interest from that sector was lower than expected; its reinforced floors, backup power and advanced ventilation are now seen as a potential fit for defence and AI firms.
3. Industrial sites and forecasts
Savills estimates European countries’ defence spending could create demand for 37 million square metres over seven years. In Britain, it forecasts up to 3 million square metres of industrial and logistics demand and nearly 250,000 square metres of additional office and R&D space. Tritax Big Box has identified defence as a potential growth sector, while Panattoni said it was in active discussions with defence companies near its redevelopment of a former Honda plant.
