Specialist real estate and infrastructure companies are ideally placed to benefit from the digitalisation of economies, that ever-increasing use of technology to power our world, which saw a surge during the Covid-19 induced lockdown.
The strong socio-economic forces fuelling the increase demand from tenants and investors alike are likely to outweigh the any effects caused by central banks winding down of quantitative easing and increasing interest rates.
Matthew Norris, Investment Adviser Gravis Advisory and portfolio manager of the VT Gravis Digital Infrastructure Income Fund says: “As we enter 2022 the market continues to oscillate. In the short-term this is between the risks associated with elevated levels of inflation and the optimism linked to successful mass vaccinations and continued economic growth.
“The prospect of global central banks removing monetary stimulus and increasing interest rates is moving ever closer and this is likely to put pressure on asset prices. However, the secular trends that have made digitalisation an increasingly important part of the economy are still in place.
“The pandemic has accelerated the move to a digitalised world and through regular repetition many new digital habits have been formed. Even when Covid-19 is eventually tamed it is highly unlikely that these new ways of living, working, and playing will be fully reversed. To the contrary, the pandemic has acted as a catalyst to accelerate the digitalisation trends already in motion. This digitalisation mega trend looks set to continue.”
Norris believes digital infrastructure companies will continue to grow as will the appetite amongst investors for next generation infrastructure assets, generating reliable income.