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Industrial property news

  • Knight Frank says the Clyde, Plymouth, Portsmouth and Sheffield took 98% of the headline value, creating demand for specialist industrial space.

UK defence facilities passed 46 public milestones in Q3 2026, with a combined headline programme value of £28.4bn and 4,550 jobs cited, according to Knight Frank. The milestones included funding commitments, planning approvals, construction starts, completions and leases.

Knight Frank said the figure reflects the headline value of each announcement, much of it multi-year funding, rather than new capital committed in the quarter. The ten-year, £26bn Project Royal Oak dominated, covering naval infrastructure at HMNB Clyde, Devonport and Portsmouth.

The Clyde attracted £15.3bn, including a reported £6bn UK-only competition to build three floating dry docks for nuclear submarines. Plymouth recorded £7.3bn and Portsmouth £3.9bn. Sheffield and Rotherham logged five announcements worth £1.4bn, led by Sheffield Forgemasters, which topped out a 30,000 sq m machine shop.

Tekever is fitting out the 254,000 sq ft Spectrum Building in Swindon as its main European factory. Isembard opened a 160,000 sq ft headquarters and manufacturing facility in Southwark in September.

Knight Frank said the requirement is for secure, powered and adaptable facilities near talent and test environments, rather than general sheds and offices.

Charles Binks, Partner and Head of Logistics & Industrial Agency at Knight Frank, commented: “Programmes worth £28 billion passing milestones in a single quarter marks a significant shift in how the defence sector is becoming a more prominent driver of real estate activity. From naval bases to advanced manufacturing, these investments are generating sustained demand for specialist real estate, particularly industrial and logistics space, while creating jobs and reinforcing the strategic importance of the UK’s key defence locations.”

The Autumn Budget closed the £4.7bn gap in the Defence Investment Plan and committed £5bn of defence investment through the National Wealth Fund and British Business Bank. The route to 3.5% of GDP on defence by 2035 will not be set out until the 2027 Spending Review.