A major new defense manufacturing site is preparing to launch in central London, becoming the largest facility of its kind in the city since World War II. British startup Isembard plans to produce components for drones, missiles, robotic systems, submarines and jet engines at the plant, the Financial Times reported, citing company executives.

The four-story factory and Isembard’s headquarters were built on the site of a former vehicle depot. The complex covers a total area of 160,000 square meters. CEO Alexander Fitzgerald said the company expects to supply its products to customers including US defense technology firm Anduril, Britain’s Babcock International and the UK government.

Isembard is also expanding beyond its new London facility. Around 15 factories operating under the company’s franchise model are already active in the United Kingdom, the United States, France and Germany. Experts value the startup at approximately $500 million.

The expansion comes as London moves to increase military spending. Britain currently allocates about 2.5% of GDP to defense. Former Prime Minister Keir Starmer said the country should ultimately raise that figure to 3% during the next parliament, with the election due no later than August 2029.

Britain’s Conservatives have also proposed finding additional money for the military budget. Party leader Kemi Badenoch called for changes to disability benefits and housing support, arguing that higher defense spending is needed to counter Russia.

The Conservative plan includes reforming housing benefits and imposing VAT on vehicles provided through the Motability scheme. The party estimates that the measures could generate an additional £10 billion a year, with the money intended to help lift defense spending to 3% of GDP by 2030.