Building Europe's backbone: the sustainable power of industrial real estate

This transformation is expected to significantly increase demand for industrial and logistics real estate – particularly through upgrading and retrofitting Europe’s outdated industrial stock to meet new efficiency and capacity needs. As a result, research and development, light industrial facilities, production sites, and logistics infrastructure are providing attractive investment opportunities.

Are sheds the unlikely opportunity for sustainability?

Limited space and the need to decarbonise existing buildings make industrial refurbishments and developments a key opportunity. When successfully re‑designed and refurbished, these assets can support sustainability characteristics while strengthening supply chains that are vital to national infrastructure.

Energy efficiency, decarbonisation and power management

According to the International Energy Agency (IEA), buildings are directly and indirectly responsible for around a third of global energy- and process-related carbon dioxide (CO2) emissions [1]. The EU’s revised Energy Performance of Buildings Directive has emerged as a crucial legislative framework aimed at promoting the renovation and construction of energy-efficient buildings. This directive is a pivotal component in the EU's broader agenda to enhance energy efficiency and reduce carbon emissions in the building sector. Another significant revision is the increased focus on using renewable energy sources. There are targets set to ensure that 49% of all energy consumption in new and substantially renovated buildings comes from renewable sources [2].

One of the biggest challenges for logistic and industrial buildings is the significant power requirements that are needed to operate machinery on-site and to charge electric fleets. While refurbishment can contribute substantially to improving energy efficiency in buildings, the real opportunity is using rooftops and adjacent brownfield land to provide local and efficient renewable energy sources. On-site renewable energy generation via photovoltaic cells and wind turbines, combined with battery storage and smart energy management systems, can create a unique opportunity to decarbonise on-site operations, including powering electric fleets.

Resilience to physical climate risk through nature-based solutions

Decarbonisation is key to mitigating acute and chronic weather events caused by climate change. However, the world is struggling to curb global carbon emissions at the required pace. Therefore, assets also need to improve their resilience to extreme weather events to mitigate the associated operational risks of disruption.

While government investment in infrastructure, such as sea flood defences, can help to minimise that risk, local nature-based solutions can also help. They can improve resilience to physical climate risk, increase the wellbeing of tenants and surrounding communities, and enhance local biodiversity.

Industrial assets are well suited to implement nature-based solutions because of their unique features: large walls and roofs, and larger plot sizes with outdoor space.

Resilience examples include [3]:  

What about the social benefits?

Investing in local manufacturing supply chains through the presence of a well-designed and managed industrial asset can have multiple positive social impacts on the wellbeing of its tenants and for the wider community. These benefits include creating jobs, reducing inequalities, supporting local businesses, improving local services and amenities, and aiding urban regeneration.

Final thoughts…

Europe’s drive to strengthen resilience and revitalise local manufacturing can also support its long‑term sustainability goals.

Greater security helps stabilise economies and societies. It creates the conditions needed for climate‑transition investment, social cohesion, and the protection of critical infrastructure. It also enables the EU’s broader decarbonisation ambitions. Investments in security technologies – such as AI‑enabled systems, advanced sensors, and cyber solutions – can further enhance energy efficiency, climate monitoring, disaster response, and infrastructure resilience. At the same time, shifting from globalised supply chains to more sustainable local manufacturing can cut carbon emissions and boost local employment.

Industrial property sits at the heart of this transition: upgrading assets with renewable energy, climate‑resilient design, and strong social-value practices can underpin security, strengthen supply chains, accelerate decarbonisation, and support thriving, resilient communities.