The UK risks falling short of Nato defence spending targets unless it immediately slashes planning red tape to address its land shortage, the government has been warned.

Demand for defence-related industries and logistics space is set to surge to 32m sq ft by 2033 if the government meets Nato’s defence spending targets. 

The UK is on track for a shortfall of 14m sq ft by the next general election in 2029 unless it immediately ramps up efforts to secure this space, industry body Real Estate UK has warned.

The planning, infrastructure and skills barriers faced by developers pose a “significant risk to the government’s overall defence objectives,” chief executive Vanessa Hale said. 

Defence-related activity accounted for 1.3m sq ft in the first half of this year, according to analysis produced by Real Estate UK, CoStar and Savills and shared with City AM.

The recently-published defence investment plan (DIP) is expected to propel activity among manufacturers and suppliers, putting 2026 on course to be one of the strongest years for defence-related activity in the UK.

The Ministry of Defence’s 545,000 sq ft drone testing centre in Swindon, opened in June, was the biggest development this year and “underpins the accelerating cluster expansion” across Derby, Plymouth and South Wales, the analysis found. 

But Real Estate UK has warned that the UK is running out of room to fuel its defence ambitions. Hale said the shortage of land, skills and grid capacity must be “urgently addressed”. 

She added: “The overall success of the government’s defence ambitions [rests] upon whether the UK can provide the buildings, land and enabling infrastructure needed to support a more resilient domestic defence supply chain.

“Real Estate UK calls on Ministers to work closely with us to help remove barriers to more take up, which means more jobs, modern workplaces and a safer realm.”

Defence targets ‘depend heavily’ on land

Alongside the 14m sq ft in manufacturing and logistics space required to meet defence targets, the analysis found that another 2.6m sq ft in office space will be needed to support the 12,600 new admin jobs that will be created by the sector’s expansion.

Speaking at Labour’s party conference this week, defence secretary Wes Streeting defended his commitment to spending 3.5 per cent of GDP on defence by 2035.

Streeting said the government will invest in British companies and jobs to drive this expansion, but Real Estate UK said the country’s land shortage leaves this pledge at risk.

Robert Pearson, a director at Savills, said: “Delivery of the Government’s military goals depends heavily on the availability of suitable physical space. 

“Defence occupiers often need secure, power enabled, resilient and highly specialised facilities, with specific requirements around access, servicing, ownership, clearance and operational security.”

The Ministry of Defence was contacted for comment.