With the SDR representing the largest sustained increase in defence spending since the Cold War, Savills has been considering the implications for the industrial and logistics sector. In the following sections, Savills seeks to build on the insights from PA and quantify the impact
Given the varied inputs, outputs and processes involved in defence manufacturing, it is difficult to quantify the density with which the defence manufacturing occupiers use space. For simplicity, we assume that taking the industry standard density for B2 uses of 36 sq m per worker should hold in the most bearish of cases. Indeed, if we consider the bespoke needs of the sector, it is likely that the needs for many manufacturers in the industry will be much higher.
Crucially, we would note that the implications of this spending go beyond warehouse demand derived purely from the manufacturing of direct military equipment, but also indirect demand from the production of inputs and logistics operators servicing the sector. Indeed, logistics jobs created by this spending can be expected to have a greater impact job-for-job, with a density of 79 sq m per worker.
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