Commercial real estate’s role in manufacturing success

Manufacturers account for almost a quarter of industrial and logistics real estate demand in the UK. In a climate of heightened geopolitical turbulence, many are looking to build resilience in their home market: our recent Future Space survey found that some 42% of manufacturers are considering near or onshoring part of their supply chain.

But resilience is not just about geography. It is being defined by how manufacturers respond to three converging pressures – energy, labour and technology – and in each case, commercial real estate has a critical role to play.

Taking the heat out of high energy costs

UK energy costs are among the highest in the developed world. Of some 132,000 UK manufacturing enterprises, only around 7,000 qualify for government subsidies. At the same time, energy usage is rising rapidly. Future Space found that 82% of occupiers across all sectors expect their power needs to climb over the next three years, as technology adoption and fleet electrification increase demand.

The cost and ESG implications of intensifying power needs will elevate the importance of modern buildings with intelligent management systems and features that reduce energy demand and minimise wastage. For manufacturers looking for new space, heavy power requirements and/or complex operations may favour a build-to-suit approach, but the timings involved in delivery mean early engagement is critical.

For buildings of all types, close collaboration with a landlord’s asset management team, including through data sharing, will be key to securing ongoing energy efficiencies and accessing the latest renewable technologies.

Working harder for labour

The average worker in manufacturing is 52, and 22% of the workforce are set to reach retirement age in the next five years. There is clearly a need to attract new talent and replenish the pipeline. Labour costs are also rising. Higher employer National Insurance contributions clearly impacted manufacturers in 2025, with more than half (55%) of UK manufacturers in our Future Space survey saying that rising labour costs are having a significant impact on their business.

These pressures are likely to be compounded by competition for warehouse-based employees. Some 59% of the manufacturers we surveyed expect their workforce to grow over the next three years and 50% want additional technicians and skilled labour, as technological and operational advancements drive the need for a broader skills mix.

All of this is making location decisions increasingly important – either in areas with an established talent pool, or in assets where real estate providers proactively partner with local academic institutions to support skills building. Designing and maintaining attractive workspaces can also make a real difference when it comes to hiring and retention.

Facilitating new technologies

There is also a gap between what manufacturers say they want to do on technology and what is happening on the ground. Future Space shows that there is scope for both greater technology adoption and for manufacturers to optimise their industrial and logistics footprint to facilitate it. But just 25% of the manufacturers we surveyed consider themselves to be highly tech intensive, compared to 44% across all occupier groups.

For manufacturers with access to capital, there’s clearly an opportunity to capture efficiencies through technology, which will drive rotation into higher quality, more modern buildings that offer power resilience, excellent floor quality and eaves heights to accommodate robotics and automation.

Achieving this requires close collaboration with commercial property providers, including through build-to-suit development. In October 2025, Tritax Big Developments delivered a £250m facility for Siemens at Tritax Park Oxford. Developed through years of close partnership to deliver a highly specialised facility in a location critical to accessing the skilled workforce Siemens required, the facility is now undergoing specialist fit-out, with operations scheduled to begin in early 2027.

As manufacturers focus on enhancing resilience, their real estate is an area where efficiency and productivity gains can achieve competitive advantage. Pressures including higher oil prices and supply chain disruption mean manufacturers need to prioritise long-term competitiveness through factors within their control, and real estate can play a pivotal role.

By accommodating energy solutions, supporting the attraction and development of talent, and facilitating new technologies, it is clear that the right facilities are and will remain central to the success of UK manufacturing.