LOGIC: Logistics Sector Update - Summer 2026
Defence Logistics Real Estate: From Projections to Practice
By Lynsey Inglis
In “LOGIC Autumn 2025”, we examined the scale of logistics real estate demand that the UK’s renewed defence spending commitment was likely to generate. Eight months on, the picture becomes clearer, with sustained activity translating that commitment into tangible market shifts.
ING THINK reported that, as of early 2026, defence manufacturers and their supply chains accounted for 8.5% of industrial and logistics leasing during 2025 (3.8 million sq ft), nearly double the annual average recorded over the preceding decade1. This occupier activity has continued into 2026, supported by the government’s recently announced Defence Investment Plan - which will see an increase in defence funding to almost £80 billion a year by 2029, an increase in UK defence spending to 2.7% of GDP. The expectation is that this cash injection will drive sustained, structural demand for defence logistics infrastructure over the coming years, including the need for new sites and targeted investment into existing facilities. Already this year, Ukraine’s largest drone manufacturer has opened a new factory in Suffolk, and the government has announced £4.4bn of investment into Plymouth’s Devonport dockyard - the largest naval base in Western Europe, surrounded by defence supply chain companies2.
Since the end of 2025, the government and industry have moved swiftly to formalise supply chain partnerships. In March 2026, Amentum, GXO Logistics, Accenture and A.P. Moller-Maersk announced the formation of the Torus Defence Supply Chain alliance, designed to deliver resilient, agile and integrated supply chain solutions to the UK defence sector3. The alliance represents a deliberate shift away from just-in-time supply models towards defence readiness, a transition that will require substantial, modern, well-connected logistics facilities across the UK.
Since the end of 2025, the government and industry have moved swiftly to formalise supply chain partnerships. In March 2026, Amentum, GXO Logistics, Accenture and A.P. Moller-Maersk announced the formation of the Torus Defence Supply Chain alliance, designed to deliver resilient, agile and integrated supply chain solutions to the UK defence sector3. The alliance represents a deliberate shift away from just-in-time supply models towards defence readiness, a transition that will require substantial, modern, well-connected logistics facilities across the UK.
The alliance represents a deliberate shift away from just-in-time supply models towards defence readiness, a transition that will require substantial, modern, well-connected logistics facilities across the UK.
The alliance represents a deliberate shift away from just-in-time supply models towards defence readiness, a transition that will require substantial, modern, well-connected logistics facilities across the UK.
Alongside private sector mobilisation, the government has been actively building its own partnerships.
- In January 2026, the Ministry of Defence signed a Memorandum of Understanding with nine logistics workforce companies to improve the UK’s ability to mobilise personnel during times of crisis. This is a direct consequence of the Strategic Defence Review’s (published in September 2025) emphasis on enhancing “surge capacity”4.
- In February 2026, a £113m contract was awarded to the Digital Allies consortium to deliver Defence Logistics Information Services, which is intended to provide defence with modern, digitally enabled capabilities for warehousing and storage.
- In April 2026, the UK Supply Chain and Logistics Excellence (SCALE) Centre at Loughborough University established a new collaboration with the MoD to “strengthen supply chain resilience and support defence transformation”5.
Alongside private sector mobilisation, the government has been actively building its own partnerships.
- In January 2026, the Ministry of Defence signed a Memorandum of Understanding with nine logistics workforce companies to improve the UK’s ability to mobilise personnel during times of crisis. This is a direct consequence of the Strategic Defence Review’s (published in September 2025) emphasis on enhancing “surge capacity”4.
- In February 2026, a £113m contract was awarded to the Digital Allies consortium to deliver Defence Logistics Information Services, which is intended to provide defence with modern, digitally enabled capabilities for warehousing and storage.
- In April 2026, the UK Supply Chain and Logistics Excellence (SCALE) Centre at Loughborough University established a new collaboration with the MoD to “strengthen supply chain resilience and support defence transformation”5.
For logistics real estate investors and developers, it is clear the government is actively embedding private sector supply chains into its defence infrastructure, which should provide confidence to those considering long-term investment in defence-oriented facilities.
However, as examined in further detail within LOGIC Spring 2026, the UK defence sector continues to face a distinctive set of legal and regulatory challenges when entering into real estate leasing arrangements, spanning national security screening, procurement compliance, security clearance, planning, environmental obligations, and lease structuring. There is also pressure on land availability with suitable sites near transport hubs becoming more limited, and competition for land is expected to intensify as defence adds another demand stream alongside e-commerce and traditional logistics.
Looking ahead, the convergence of these developments presents an increasingly tangible opportunity for developers, investors and occupiers. Defence-related demand is no longer speculative; it is an observable market trend already reshaping leasing patterns. The ongoing tendering and awarding of government contracts create significant opportunities for developers who can offer development-ready sites. To capture this demand, these sites will need to be secure, strategically located, and capable of meeting the bespoke requirements of defence occupiers. Those who can deliver will be well positioned to benefit from what is shaping up to be a significant structural shift in the UK logistics market.
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