- Shedmasters 26 in Lisbon heard that speculative development pipelines are collapsing just as demand from defence and AI sectors accelerates.
Defence spending and data centre growth will define the next phase of industrial and logistics demand, according to research presented at the Shedmasters 26 conference in Lisbon last week.
Savills head of EMEA logistics research Kevin Mofid told more than 500 industry leaders that three decades of take-up data point to a structurally resilient market, but one on the verge of a significant shift in occupier profile. Annual UK take-up has consistently run at around 1.5% of total stock since 2000, while European take-up reached 301.8 million sq ft in 2025, some 8% above the pre-pandemic average.
Mofid identified defence and data infrastructure as the primary new demand drivers. Savills projects 398 million sq ft of defence-related logistics requirements across EMEA over the next decade, while AI and data centre ecosystems are estimated to generate a further 8 million sq ft of secondary logistics demand from related supply chains.
The outlook is complicated by a deepening supply shortage. The UK speculative development pipeline has fallen 67% since its 2022 peak, with less than one year's supply of second-hand Grade A stock now available across the country.
"The market continues to show resilience despite the current geopolitical situation," Mofid said. "With the occupier profile becoming ever more diverse and demanding of good quality units. With both the UK and European speculative development pipelines declining, there is the possibility of a shortfall in supply as we head into 2027."
Former UK Foreign Secretary Lord William Hague, who delivered the conference keynote, told delegates that the world had entered a third chapter defined by simultaneous danger and excitement. He argued that the businesses and countries best positioned to succeed would be those able to bring talent and capital together to reinvent their supply chains as AI, quantum computing and geopolitical instability converge.