The UK government’s modern industrial strategy, published in June 2025, set out a 10-year plan to strengthen eight key sectors, including advanced manufacturing. It committed £2.8B to research and development in advanced manufacturing and to specific support, such as a 90% national grid discount for energy-intensive sectors.
This investment poses a huge opportunity for the advanced manufacturing sector. However, that opportunity will only be realised if current challenges are overcome.
“The government has a key role to play, as the elements needed to make it work are not yet aligned,” said Craig Williams, partner at Gardiner & Theobald. “Greater cross-industry and public–private sector collaboration is required if we are to succeed. And while high-tech manufacturing real estate has the potential for long leases and stable tenancies, it is a highly specialist, capital-intensive sector.”
Already, the UK’s advanced manufacturing sector is substantial and includes many industries. Automotive alone contributes £92B in turnover to the UK economy, producing almost 800,000 cars and employing 800,000 people. Other industries involved in advanced manufacturing include aerospace, battery development and defence.
The UK’s battery manufacturing industry is also starting to gain traction. The government published its battery strategy in 2023 as part of its advanced manufacturing plan, outlining a vision for a globally competitive battery supply chain by 2030.
To date, there has been significant investment in just two gigafactories across the UK: the AESC gigafactory in Sunderland and Tata Group’s global battery business Agratas, which has embarked on the first phase of a £4B battery-manufacturing facility in Bridgwater, Somerset. However, by 2030, the UK is predicted to need the equivalent of six gigafactories, with less than 50% of that demand met by current known or announced plans.
There is clearly substantial opportunity in the sector, with potential UK sites under consideration in Scotland, the North East, the Midlands and North Wales, Gardiner & Theobald partner Christopher Lewis said.
Bisnow spoke to Williams and Lewis about the key real estate and market challenges facing developers and manufacturers looking to make the most of these growth opportunities in advanced manufacturing, and how to mitigate them.
Securing Land And Power Infrastructure
By 2040, demand for batteries is expected to rise to the equivalent of 10 gigafactories, which equates to approximately £12B of additional capital expenditure over the next 15 years. Beyond this, demand is expected to grow by a further 25% to 30% annually as wider mobility sectors electrify, including commercial vehicles, two-wheelers, off-highway vehicles and aviation.
On top of this, the UK needs to develop the broader battery ecosystem, including green energy, grid storage and infrastructure, raw materials mining and refining, component manufacturing, and recycling.
With this in mind, Williams said automotive manufacturers are deciding where to locate future electric vehicle model production — in the UK or mainland Europe. The European Commission has already delayed its rules of origin requirements from 2024 to 2027 to address gigafactory construction delays across Europe.
As manufacturers search for land, one of the primary limiting factors to new advanced manufacturing developments of scale is grid infrastructure and connectivity, Williams said. Manufacturers are often competing for land with data centre developments that are seeking the same criteria.
“Securing power connections can involve lengthy lead times and significant upgrades to existing infrastructure,” he said. “Developers need to move quickly with early site investigations and engagement with statutory providers, utilities, local authorities and network operators, often evaluating multiple sites simultaneously to ensure investment is made only once the criteria are satisfied.”
Gardiner & Theobald often supports developers with due diligence at this early stage, advising on cost variables associated with known ground conditions, constraints and necessary infrastructure upgrades, along with their impact on strategic delivery programmes.
The opportunities created by large parcels of land available in investment zones and freeports are considerable, Lewis said. This includes the North East and Teesside, where Gardiner & Theobald is working on several projects, such as Tees Valley Lithium’s new facility — set to be Europe’s first low-carbon lithium hub for the battery sector.
“We’re seeing a lot of activity in these areas, and there’s more to come,” Lewis said. “Landowners and developers are preparing sites and planning the infrastructure needed to develop plots for advanced manufacturing across the North East region. There’s the entire ecosystem that comes with these schemes, too, with supply chains often looking to colocate.”
Global Supply Chain Pressures
In advanced manufacturing, there is strong global demand for specialist materials and equipment, Williams said. This often translates into extended lead times and significant upfront financial commitments to secure supply.
“High-tech manufacturers operating nationally and internationally must consider global and local economic and political landscapes, taxation, import and export duties, and government incentives,” he said. “Clients are vulnerable to breakdowns in global supply and resulting production disruptions, as well as rising costs and economic volatility caused by tariffs and trade disputes.”
Gardiner & Theobald’s team tracks market conditions, procurement trends, tender price inflation and supply chain capacity, providing detailed sector-specific intelligence to keep clients informed.
Skilled Labour Shortages
A further challenge is the shortage of skilled labour, including general contractors and specialist trade operatives. The North East, however, is favourable for high-tech manufacturing because its five universities and numerous colleges provide a strong talent pipeline, Lewis said.
Gardiner & Theobald is currently working with Newcastle College on the Energy Academy 2, a training facility for people entering high-tech manufacturing and the green energy sector. The team has also partnered with the University of Sheffield on several projects, including the Royce Translation Centre for advanced powder manufacturing and processing.
“There’s an opportunity to colocate various manufacturing sectors near these training centres,” Lewis said. “Training the next generation is vital for the sector’s long-term success.”
The Rapid Pace Of Science And Technological Change
The pace of scientific and technological innovation creates pressure around speed to market, making it difficult to secure long-term offtake agreements, Williams said.
“Facilities are typically state-of-the-art and bespoke, designed to accommodate highly sensitive machinery, robotics, clean rooms and technology platforms, all requiring significant upfront investment,” he said. “Manufacturers commit to this investment based on robust business plans but may later need to pivot their product strategy.”
To counter this challenge, developers must build agility and flexibility into designs and business planning, Lewis said. Often, they do well to incorporate phased delivery approaches.
The Complexity Of Funding Streams
Clients typically manage multiple funding streams and must demonstrate value to diverse project stakeholders with strong governance and assurance protocols, Williams said. While support packages such as the Battery Innovation Programme, the National Wealth Fund and the British Business Bank aim to simplify scaling and commercialisation, unlocking this funding is not straightforward.
Financial guarantees from government-backed facilities are often complex and time-consuming to obtain, yet required before private-sector investment can follow, he said.
“We know that advanced manufacturing developments are typically large-scale, complex and fast-moving,” Williams said. “Stakeholder requirements will continue to evolve as organisations push the boundaries of science and technology. By taking a partner-led approach, we bring clear, strategic advice across these projects, helping clients navigate complexity with confidence and achieve meaningful progress.”
This article was produced in collaboration between Gardiner & Theobald and Studio B. Bisnow news staff was not involved in the production of this content.
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