The new European ‘Made in Europe’ policy, enacted through the Industrial Accelerator Act, means that the industrial property sector is not merely a side issue, but is fundamental to our economic future.
Analysed by Craig Wright
Europe’s industrial resurgence is not a belated revelation. As those who know me can attest, I have long been an advocate of this sector, and for good reason: it is one of the few sectors set to benefit from reinforced long-term structural trends.
The opportunity goes far beyond defence
Although many have focused on Europe’s rearmament as the big news for the industrial sector, I believe that the opportunity is broader and more structural.
The industrial property sector is not just a side issue; it is fundamental to our economic future.
The new European ‘Made in Europe’ policy, enacted through the Industrial Accelerator Act, as well as the UK’s modern industrial strategy, mean that the industrial property sector is not merely a side issue, but is fundamental to our economic future.
In fact, I have recently consolidated my view on the practical implications of a fragmented global system for European production. In fact, I believe that the impact would be tangible — and suitable for investment.
However, a thesis is worthless without data to back it up. European industrial properties generated annualised returns of up to 40 per cent in the early stages of the pandemic, compared with 25 per cent for logistics warehouses. But this was no one-off success: over the 15 years up to 2025, smaller industrial and manufacturing assets delivered an annual return of 9.5 per cent, compared with 7.7 per cent for logistics properties.
Policies are driving demand
So, what makes me think this trend might endure? Policies are the transmission mechanism through which theory will become reality on the ground, and I have observed how policies have gradually been aligning in this direction. Over the past year or so, leading European policymakers have openly linked economic resilience to the rebuilding of national industries. The EU’s ‘Made in Europe’ initiative, which aims to increase the manufacturing sector’s share of GDP to 20 per cent by 2035, perfectly encapsulates this new mindset. I have calculated that achieving this target would involve building around 20 million square metres of new industrial and logistics space per year for a decade — roughly the area of one and a half Heathrow airports each year. This is on top of what is already being built just to keep up. It is extraordinary.
This is just the beginning
And it is not backed by just one policy. From defence and energy to semiconductors and pharmaceuticals, Europe is reshaping its economy. It is estimated that defence rearmament alone could generate an additional industrial demand of 37 million square metres. But I believe that broader reindustrialisation requires roughly five times that amount of space. If we add to that the demand from e-commerce in Europe, which is forecast to reach 10 million square metres a year over the next five years, the tailwinds for the industrial and logistics property sector look stronger than ever.
Wide scope; scarce supply
The real draw for investors is the breadth of what ‘industrial’ now encompasses. It is not just about gigantic warehouses for online shopping or dilapidated industrial units with a guard dog tied up outside. It encompasses high-tech workshops, clean-energy manufacturing plants, defence facilities, pharmaceutical production centres, cold stores and the supply-chain infrastructure needed to support a more self-sufficient Europe. Such facilities are in short supply. That scarcity, combined with the need for them and increasingly firm political support, is why I believe industrial assets will outperform in the future.
