Europe is undergoing one of the most profound fiscal and industrial transformations in its modern history, writes Justin Curlow, head of research and strategy at BNP Paribas Asset Management Alts.
After decades of underinvestment in defence following the Cold War, the region is entering a sustained period of rearmament, driven by increased geopolitical tension, security concerns and a renewed emphasis on strategic autonomy.
For real estate investors, the implications will be real but nuanced: While this structural shift opens the door to long-term opportunities, only those with the right strategies, stock and geographical exposure will be able to capitalise on it.
At the core of this transformation is a sharp increase in defence spending. NATO’s European members have already raised expenditure from around 1.4 percent of GDP in 2022 to slightly more than 2 percent in 2024, with a new target of 3.5 percent by 2035.
National targets must always be taken wi
