Industrial land gains strategic importance amid rising defence spending

A notable example can be found in Romania, where a site of approximately 813 stremmata (813,000 sq. m.) opposite Mihail Kogălniceanu Airport and near the NATO base of the same name in Constanța is being marketed for sale as a “Defense Investment Opportunity”.

The property comprises five plots and, according to the listing, could be expanded to cover up to 3,000 stremmata. The asking price for the entire site is €18 per sq. m., equivalent to approximately €14.6 million. For individual plot purchases, the price increases to €25 per sq. m.

The expansion of Mihail Kogălniceanu Air Base has already been associated with increased interest in local real estate. In 2022, local media reports indicated that land prices in the area had risen following the announcement of the base expansion plans, reaching up to €50 per sq. m. in some cases.

Today, in addition to the large 813,000 sq. m. site being offered at €18 per sq. m., smaller properties near the airport and military installation are being marketed at asking prices of approximately €26–50 per sq. m.

Greece’s Industrial Property Landscape Is Also Changing

In Greece, the initial impact of increased defence investment is being felt primarily through the redevelopment and reuse of existing industrial facilities rather than through changes in land prices.

In Lavrio, Hellenic Defence Systems and Czech defence group Czechoslovak Group (CSG) have agreed to establish Hellenic Ammunition, a venture focused on the production of large-calibre ammunition at Hellenic Defence Systems’ facilities.

The agreement provides for the management of the facilities over a 25-year period, alongside a modernisation programme. CSG’s long-term investment commitment could reach €50 million.

The project includes the upgrading of production infrastructure and the installation of new manufacturing lines, bringing previously underutilised industrial assets back into active use.

Elefsina: €1.35 Billion Investment Plan

A larger-scale investment programme is under development in Elefsina. ONEX and South Korean company Hanwha Ocean have agreed on a framework for cooperation envisaging investments of up to €1.35 billion to upgrade shipbuilding, industrial and supporting infrastructure.

The plan includes an initial investment of €150 million in ship repair facilities, a second phase involving €200 million for port infrastructure and logistics, and a potential third phase of €1 billion for advanced equipment and specialised manufacturing facilities.

The implementation of these investments could generate additional demand for warehouses, industrial premises, subcontractor facilities and ancillary business operations across Western Attica.

Elefsina combines port facilities, heavy industry and access to major transport networks. These characteristics have already contributed to increased demand for industrial and logistics properties throughout the wider area.

Drones in Malakasa

A different category of defence-related real estate is emerging in Malakasa, where the establishment of the 309th Unmanned Aircraft Manufacturing Plant is progressing.

The project involves the reconstruction and modernisation of former military facilities covering approximately 2,800 sq. m., which are intended to accommodate manufacturing, technical and support operations.

The production of drones and electronic systems creates requirements that differ from those of traditional heavy defence manufacturing. It calls for smaller but more specialised facilities for assembly, electronics, research and development, testing and technical support.

The expansion of European defence manufacturing has the potential to create a new subcategory within the industrial real estate market.

Beyond production lines themselves, the sector requires warehouses, research and development centres, assembly facilities, maintenance and repair premises, as well as properties suitable for suppliers.

These requirements differ from those of conventional logistics operations. Security, permitted land uses, separation from other activities, energy capacity and access to road, rail, port and air transport infrastructure are becoming increasingly important considerations.