FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
By Anne Brom (Savills Cross-border team) and Abe Jongbloed (Head of Property Management Netherlands)
In today’s European logistics market, access to power is no longer a given: it is a strategic asset. What was once a future challenge is now an immediate constraint. In many locations, grid capacity is already insufficient to support existing operational requirements, let alone future demand from electrification, automation, and energy-intensive occupiers. Property managers are increasingly focused on helping clients future-proof their logistics assets by securing power supply, reducing emissions, and managing grid capacity more proactively.
When power becomes the dealbreaker
Recent examples highlight how critical power availability has become:
At a site we manage, a prospective tenant expressed strong interest but only if the site’s capacity could be increased from 500kVA to 5MVA (a tenfold increase). At the time, the required upgrade was relatively straightforward, with estimated costs of circa £100,000 for new switchgear and a short connection to the substation. The letting did not proceed.
One year later, a similar requirement emerged from another tenant. However, by then the local substation had reached capacity. The same upgrade was now estimated at over £2 million.
A missed opportunity quickly became a significantly more complex and costly challenge.
The risk of losing power
The challenge is not only about securing additional capacity but also about retaining it.
In another case, a landlord did not include a power preservation clause within the lease. As a result, a tenant in an urban logistics unit reduced the grid connection from 200kVA to just 14kVA, reflecting their operational needs as a tyre distributor.
Once released, that capacity could not be recovered. There was no ability to regain the original power supply.
This highlights a growing risk: without the right lease structures and asset strategies, valuable grid capacity can be permanently lost.
From risk to opportunity
Power availability is now a key driver of asset performance, tenant demand, and long-term value.
We are increasingly supporting landlords in turning this challenge into an opportunity by focusing on:
- Grid capacity and resilience: Assessing infrastructure, advising on upgrades, and protecting operational continuity
- Alternative energy solutions: Exploring supplementary or independent power sources, including third-party energy suppliers and on-site generation, which are becoming increasingly common as traditional grid access becomes constrained
- Emission reduction strategies: Supporting electrification, energy efficiency, and renewable integration
- Smart asset planning: Aligning capex with future energy demand, including EV charging and automation
- Tenant engagement:Managing consumption, optimising usage, and future-proofing lease structures
We also support clients in identifying potential stranded assets, where insufficient power supply may limit future leasing or redevelopment potential.
A changing regulatory landscape
Across Europe, up to 50 per cent of reserved grid capacity can remain unused, limiting the development of new projects. As a result, unused capacity is increasingly expected to be optimised or released, with grid operators able to reallocate it and new flexible contract structures emerging to improve efficiency. This reinforces the need for landlords to actively manage their grid connections; not just as a utility, but as a core component of asset strategy.
In an increasingly constrained energy environment, property management plays a central role in bridging technical, operational, and sustainability challenges.
