TIME Investments, which specialises in real asset income-producing funds, including the TIME:UK Infrastructure Income Fund, is predicting higher investment in UK infrastructure as the private sector steps in, and has identified seven UK infrastructure sectors where it believes there are opportunities for growth and could be significant potential for investment in the future.
1. GP Surgeries
As Western healthcare adapts to the rapidly ageing population, the demand for both preventative health treatment and far more primary care services will only increase, leading to significant opportunity to build and manage the modern, multi-purpose medical centres of the future. These are fit-for-purpose buildings with parking and other transport links, where patients can see GPs or nurses, take tests and be monitored, and collect prescriptions from the on-site pharmacy. Listed companies are already involved in the provision of GP surgeries in the UK and this looks set to expand. TIME is capitalizing on this trend and holds Primary Health Properties PLC and Assura in its funds.
2. Data centres
AI has led to ballooning demand for the warehouse-like data centres needed to supply all the data-crunching hardware AI requires. Data centres have to be sited in specific locations that can accommodate their need for a huge power supply, cooler temperatures, cooling systems and water. With appropriate sites and land availability at a premium, demand is likely to outstrip supply for some time, creating favourable dynamics for investors. TIME is invested in this rapid growth by investing in US data centre REITs such as Digital Realty and Equinix along with logistics REITs such as Prologis and Tritax Big Box which see data centre investment as complementary.
3. Solar farms
Photovoltaic solar power is now the cheapest way to generate the UK’s electricity, and increased government support for solar has led to more predictable returns for investors as new solar projects are being rapidly approved. The promise the sector shows has resulted in TIME investing in listed solar funds, most notably Bluefield Solar Income.
4. Wind farms
The seven years to 2024 have seen wind power capacity in the UK increase by around 60%. In 2024, wind generated nearly 83 terawatt hours1 of electricity across the UK –with 15.7GW now produced onshore and 14.7GW offshore2 – contributing to the UK’s achievement of drawing 56% of its energy from clean energy sources last year. The Labour government continues to invest in the development of wind and other renewable energy projects, which will also result in a demand for skilled workers in these industries.3 This could benefit listed companies such as Greencoat UK Wind, one of the top five holdings of TIME’s infrastructure fund, with greater opportunity to invest.
5. Energy storage
With the acceleration in renewable energy creation, mass battery storage is set for significant growth, with the UK’s project pipeline currently standing at 127GW of capacity4. TIME has previously been cautious on exposure to battery storage while the market assesses the volatility of revenues, and we will continue to monitor the reliability of income streams as both power-price agreements and revenue models evolve. Hydro-pumped storage could come back as an investable class as the government embraces new policy in this area.
6. Communication towers
Growing requirements to transfer ever-increasing volumes of data at faster and faster speeds has brought heavy investment in communication towers and their numbers have risen significantly. Could the rise of cellular data transmitted by satellite pose a long-term risk to ground-based towers? TIME believes that satellite transmission is evolving and will allow rural and less densely populated areas of the country to have more reliable data. But the need to transfer ever increasing loads of data at ever increasing speeds means physical communication capacity is only likely to increase. TIME invests in two US infrastructure REITs with portfolios invested heavily in this structurally supported communications space.
7. Public-private partnerships
During the halcyon days of the private financial initiative (PFI) in the early 2000s, billions of pounds worth of projects were delivered by private companies for the government, local authorities and the health service. The demise of PFI – there has been no UK-wide delivery system since 2018 – has likely contributed to a slowdown in infrastructure projects, in spite of several successful public-private projects in Wales, and the Thames Tideway super sewer.
The Labour government has committed to ‘Get Britain Building Again’ and identified infrastructure as a growth driver. The latest UK infrastructure pipeline published by the government predicted £775bn to be spent on both infrastructure and construction across private and public sectors in the coming decade.5 So TIME expects to see a more government-led infrastructure strategy and perhaps a rise in public-private partnership projects.
Andrew Gill, Co-Fund manager, TIME:UK Infrastructure Income, comments:
“The low investment in infrastructure by many countries, including the UK, over recent years has almost certainly been a contributor to lower economic growth. As the UK and other Western governments have little fiscal headroom, we now expect the private sector to do much more of the heavy lifting.
“The UK government is increasingly recognising that it needs to create an environment where private capital can flourish, so it will likely aim to develop more accommodating strategies and legislation. In addition, with interest rates on the way down and opportunities growing in many of the sectors that we invest in, we believe the next seven years will bring exciting and bountiful infrastructure opportunities.”
TIME is part of the Alpha Real Capital Group, which encompasses Alpha Real Capital LLP (AlphaReal) and TIME Investments. AlphaReal is a specialist institutional real assets investment manager focused on secure income strategies. It invests in UK and European assets with predictable secure long-term cash flows. It provides market leading and innovative real asset solutions across a range of investments such as Commercial Ground Rents and long lease property, renewable infrastructure, social infrastructure and secured lending.
TIME is the Group’s authorised wealth management investment solutions arm. The Group works with a wide range of UK, European and international investors, including pension funds and other large institutional investors, as well as private investors, family offices and wealth managers. Together, the Group has a 180-plus strong professional team and £5 billion of assets under management.
The value of investments and the income from them may fall as well as rise as a result of fluctuations in the market, currency or other factors and investors may not get back the original amount invested. Any past performance data cited is not a reliable indicator of future results.
