Crises by their nature have a way of accelerating change. This is a time of immediate and yet sustained change in a matter of moments, which might otherwise have taken years. We have dived into a lower-rate environment where, current valuation dislocations aside, infrastructure’s return profile will be highly prized.
Many of the themes that are gaining momentum are those that we have been looking at for some time. While transport is paused, the world has shifted to remote working, supported by communications infrastructure. We were already seeing massive growth in the sector, but now, with all work and entertainment taking place at home, we are seeing a paradigm change in the dependency of the workplace on cloud infrastructure, and of individuals on their homes’ connectivity.
In terms of how we work, collaboration is key, and this central part of our asset management strategy – an initiative we call Orca One – has been welcomed in the crisis. In navigating unprecedented circumstances, the management teams of our assets are benefitting from cross-portfolio collaborations – our UK airports, for example, have had a weekly call to share insights and learnings. From a GP perspective, we’re engaging more than ever with clients through technology, and recognising the importance of communicating transparently, and with candour, in times of uncertainty.
Another persistent theme is infratech. This trend has proved its value in enhancing traditional infrastructure businesses so their activities can continue. Our US intermodal logistics business ITS ConGlobal has made use of tech innovations to protect its workforce: geofencing of sites and a mobile app mean staff can clock in for work digitally, removing the physical touching and social crowding that typically happen at clock-in points.
As normal activities resume, it seems inevitable that we will shift towards a new normal of PPE and temperature testing. Health technology will be a huge focus in the years to come. Biometric testing is likely to become the norm at passenger travel hubs and places of work and leisure. These ‘infrastructure-adjacent’ sectors are ripe for investment.
Curiosity in a changing world
Belonging to the past is part of the human condition, and yet now curiosity about the future will be key. We’ve always been curious and in this climate of change, curious investing will be critical to how we support a changing world and capture opportunity for our clients. There will be lasting changes to human behaviour, to global distribution networks, supply chains, food infrastructure and cold storage, to biotech, biodata, pharmaceuticals, and care businesses.
Finally, our assets remain essential to their communities following their reinvention in this period. Primary care centres and airport car parks have been turned into temporary covid-19 testing centres. Stadiums, such as the Optus stadium in Perth, Australia, have been turned into crisis centres; and conference centres have even served as parliaments, such as the CCD in Dublin, which has been selected as the prospective location for the Irish legislature. We are proud of how our assets have adapted to support their communities.
Investors must remain nimble, open to trends, and look to what is essential to the future of modern living.