Inside the AI, Automation and Robotics Revolution that’s Reshaping Industrial & Logistics Real Estate
Artificial intelligence, robotics and automation are already reshaping how businesses operate across retail, logistics and manufacturing
While these technologies promise sweeping operational efficiencies, cost savings and improved products, they are probably the most significant disruptors since the invention of the internet and bring with them new and evolving demands on industrial real estate.
The overall location strategy for logistics and industrial space is largely unchanged, but how it is designed, powered and operated is being reimagined.
From greater clear internal heights to higher specification floors and integrated tech infrastructure, the warehouse of the future is no longer just about where it sits, it’s about how it’s built, what’s inside and how much power it has. This shift presents opportunities and challenges for property owners, developers and occupiers alike.
Retail stands to gain significantly from AI, particularly generative AI, which could unlock up to £290 billion in economic value. Much of this will be realised in the supply chain through improved demand forecasting and route optimisation.
Roughly half of activities within distribution centres, such as picking, packing and sorting can now be automated. Yet only around 5% of jobs are fully automatable, meaning humans remain central. As a result, spaces need to be flexible and resilient to meet the dual demands of AI-enabled systems and human labour. But property owners must also invest in infrastructure that enables automation such as greater clear internal heights, better floor flatness and loading, mezzanine levels, and robust power and data capacity.
Since acquiring robotics start-up Kiva Systems in 2012, Amazon has boosted warehouse automation and improved delivery speed while cutting costs. It has developed a range of robotic systems for inventory management, heavy lifting and its first fully autonomous robot using real-time computer vision. Reports indicate that at some locations Amazon has reduced fulfilment costs by 25% and the company is projected in the future to save billions of dollars annually.
Despite these advances, retailers are unlikely to alter their real estate location strategies. The gravitational pull of existing logistics ecosystems and being close to suppliers, hubs and customers continues to dominate site selection.
Third-party logistics providers (3PLs) continue to rapidly adopt automation to improve efficiency and scale operations. Estimates suggest that AI-driven tools in planning, inventory management and forecasting can reduce costs by 20–30% and cut labour expenses by as much as 20%.
As these systems are often bespoke and capital-intensive, they are prompting a longer-term outlook. Occupiers are showing increased willingness to commit to longer leases to justify their upfront investment in automation infrastructure.
Logistics companies continue to prioritise connectivity to population centres, particularly for time-sensitive goods such as perishables, pharmaceuticals and e-commerce fulfilment.
The ability to reach consumers quickly and efficiently is still paramount, and automation only strengthens the need for reliability in transport and data infrastructure.
DPD UK partnered with Deus Robotics to trial a fully automated warehouse solution using advanced robotics and AI-powered software. The system includes custom-built robots, intuitive web applications and specially designed transport cages to streamline warehouse operations.
These robots, equipped with obstacle-detection technology, can move racks weighing up to 500kg and boost productivity by up to five times. The automation allows employees to focus on higher-value tasks and reduces physical strain.
Manufacturing is further along the automation curve than retail or logistics, with Industry 4.0 already well underway. AI serves as a control centre, integrating robotics, sensors and analytics into a seamless production system.
The focus now is on refinement and optimisation to create smarter, more resilient facilities.
Manufacturers have well-defined site selection criteria: dependable power supply, access to a skilled workforce and proximity to transport links (ports, rail).
But one increasingly important consideration is planning certainty. These companies often require permissions/permits in place before committing to a site, making pre-leasing and collaboration essential.
The convergence of AI, robotics and automation is not fundamentally shifting the logistics map, but it is rewriting the rules of engagement within established markets.
From a design standpoint, occupiers are seeking designs of warehouses which enable denser, more efficient storage and support specialised automation zones such as charging docks, staging areas and robotic work cells.
Power and connectivity have become mission critical, with a need for robust power sources and seamless digital infrastructure, including fibre-optic internet and mobile connectivity. These capabilities are not just “nice-to-have” but fundamental to uptime and operational continuity.
Developers are also playing a more active role in enabling their customers’ innovation. Whether through shared capital investment or future-proofing building specs, occupiers are looking for a partnership approach, not just a transactional relationship to lease space.
In summary, industrial & logistics real estate is entering a new era which is less defined not just by size and location, but also by efficiency, performance and adaptability. The winners in this next chapter will be those who not only understand where occupiers want to be, but what they need to succeed once they’re there.