Aberdeen analysis reveals countries best placed to ride European reindustrialisation wave

After 75 years of globalised, export-led production, Europe is realigning its industrial base for resilience.  Some have bigger mountains to climb than others, and it has been reported that the EU may launch the Industrial Acceleration Act (AAI) within the month.

New analysis from Aberdeen Investments assessing fourteen European countries, reveals the real estate markets best positioned to lead Europe’s industrial reset, with industrial and logistics best placed to create resilience. Germany is the standout leader, followed by the Netherlands, UK, France and Spain, respectively. 

Aberdeen identified ten key factors that materially influence a country’s capacity to capture incremental demand arising from European reindustrialisation trends. The research, published today, comes as increased fiscal initiatives for defence and infrastructure spending are widely seen as critical for Europe’s economic resilience, security and growth. 

Craig Wright, Head of European Real Estate Research, Aberdeen Investments, says: “In an uncertain, increasingly fragmented world, where alliances are shifting and supply chains are increasingly stressed, countries and governments need resilience. Policymakers across Europe are prioritising the development of domestic and regional capabilities. 

“The challenge creates opportunities. We expect to see stronger cash flows for industrials and logistics, stronger rental growth, and urban locations close to large pools of skilled labour, with higher levels of on-site security. Rental growth is likely to comfortably beat inflation long term.”

The Aberdeen Investments European industrial market assessment, (see below) ranks real estate markets across ten categories: economic growth, economic resilience, risk, liquidity, industrials, logistics depth, nearshoring potential, defence spending and security, e-commerce penetration and return forecasts. Countries scored from 5 (best) to 1 (weakest), based on an assessment of current resilience, defence spending and capacity for growth. Each factor was anchored to reputable third party indices and externally validated datasets to ensure robustness and comparability across countries.

Germany is the clear leader, averaging a score of 4.7, with a top score of 5 in eight out of the ten categories. The Netherlands, in second place, averaged a score of 4.1, scoring 5 in three of the ten categories (industrial index, logistics index and e-commerce penetration).  See notes to editors for methodology.

Interestingly the UK ranked in third place, with an average score of 3.9, but with a top score of 5 in four key categories (risk navigator, liquidity, defence/ security and e-commerce penetration). This puts the UK in good stead to benefit from reindustrialisation and growing ties to the rest of Europe.  While the UK had a weaker economic resilience score, the data from Oxford Economics doesn’t show a huge spread across the major European economies, and the UK only just slips into a 2 rating in Aberdeen’s methodology.

Craig Wright continues: “Years of hyper-globalisation have made Europe vulnerable in sectors like security, energy, chemicals, critical minerals, food, automotives, and technology – value chains that have been fractured and need urgent reconstruction. As a result, the continent now faces the consequences of overreliance on Asia for economic inputs and the US for security. We are keeping an open mind to where new opportunities will emerge, but we believe that established locations in Germany, France, the Netherlands, Spain and the UK will offer the most compelling opportunities in the future.

“All this needs to be balanced with the need to decarbonise and the need to convert a growing share of what we already have in brownfield sites into modern facilities that are fit for the future. We won't be zoning more land for industrials and logistics in our major cities given the pressure to find more sites to accommodate more housing.”

The six big themes of the European reindustrialisation wave

1) Security, Defence & Technology
• Governments prioritising “producing in Europe for Europe” to cut external dependencies.
• Expanding defence budgets, backed by new policies such as SAFE and commitments to reach NATO defence spending targets, are catalysing new industrial capacity from airframes to missiles, deepening clusters in Germany, France, Poland, Sweden and the UK.

2) Food & Agriculture
• Heightened focus on food security is accelerating domestic production and processing. 
• Adoption of precision agri tech, urban farming and vertical systems is lifting yields and replacing Russia as a key source of fertilisers. 
• Rising needs for cold chain storage are expanding logistics footprints and strengthening regional distribution networks.

3) Textiles & Clothing
• Reshoring of higher value and essential textile categories is gathering pace as firms seek speed to market, resilience and more sustainable European production.
• Automation — from robotic sewing to advanced 3D printing.
• Industry initiatives and national programmes are revitalising skills, upgrading SME capabilities and reinforcing competitive clusters in Portugal, Italy, Spain and Poland.

4) Energy & Power
• Europe’s energy security reset is accelerating renewables deployment, storage solutions and creating infrastructure and equipment demand.
• Localisation of clean tech manufacturing is central to new policies from the EU under the Net Zero Industry Act and the Solar Charter. 
• Grid reinforcement, cross border interconnectors and a selective nuclear revival require renewed industrial capability to support Europe’s push for energy resilience. 

5) Machinery & Automotives
• The EV transition and localisation of battery/chip supply chains are reshaping Europe’s auto and machinery base
• Industry 4.0 tools and digital twin capabilities are enabling flexible, multi site manufacturing networks that enhance resilience and shorten development cycles.
• Circular economy shifts, from green steel to mandatory battery recycling, are deepening domestic input chains and reinforcing Europe’s industrial competitiveness. 

6) Pharmaceuticals
• Reshoring of medicine supply chain is advancing as Europe moves to mitigate shortages and stressed situations such as the Covid-19 pandemic.
• Diversified sourcing, expanded stockpiling and strengthened vaccine platforms are central to resilience in this value chain. 
• Growth in biologics and advanced therapy manufacturing is consolidating established hubs in Germany, France, Belgium and Ireland, with upgrades spreading into Poland and Spain.

Ends

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Notes to editors

Methodology: Aberdeen Investments European Industrial Market Assessment

Aberdeen identified ten key factors that materially influence a country’s capacity to capture incremental demand arising from European reindustrialisation trends. 

Each index was ranked from most to least favourable, and results were then grouped into quintiles. In cases where score differentials were marginal, minor adjustments were applied to avoid disproportionately penalising countries with only nominally weaker outcomes.

Once all factor level assessments were completed, we converted them into an unweighted composite score for each country. These composite scores form the basis of the final overall country rankings.

*Global Risk Navigator – Summary of Methodology and Current Rankings

Aberdeen has operated a systematic country risk assessment framework for real estate strategy implementation for more than a decade. The Global Risk Navigator Index provides a consistent measure of the absolute and relative risks associated with investing in real estate across major global markets. This framework supports portfolio construction by ensuring that the risks taken in each market are aligned with the expected return profile.

The most recent update (June 2025) was delivered at a time of heightened geopolitical volatility, offering investors a clearer understanding of cross market risk dispersion. The index is built from 10 underlying factors, sourced from a combination of external research providers and Aberdeen’s central ESG research team. The dataset is evenly weighted between ESG related metrics (50%) and real estate and macro economic measures (50%). Factors Included in the Global Risk Navigator: Market transparency, Market liquidity, Country economic risk, Sovereign debt yields, Market size, Environmental risk, Social risk, Governance risk, Climate policy strength, Physical climate change vulnerability.

Data Sources (June 2025): Aberdeen ESG (environmental, social, and governance assessments), ND GAIN 2022 Climate Adaptation Index, LSEG Sovereign Bond Yields, Oxford Economics Country Risk Ratings, JLL Global Real Estate Transparency Index, RCA Market Liquidity Indicators, MSCI Real Estate Market Size Data.

** For assessing nearshoring potential, we applied a structured qualitative evaluation of each country’s suitability to absorb relocated industrial capacity. This assessment focused on the following dimensions:
Logistics and operational costs, Quality and breadth of existing multimodal transport infrastructure, Labour costs, Availability of highly skilled labour and precision manufacturing expertise, Presence of strategically located ports with access to emerging EMEA trade routes (Turkey, the Middle East, and North Africa).

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