The confluence of real estate and infrastructure: a research agenda

Abstract

Infrastructure and real estate are important components of the global economy, which have numerous points of confluence. As the countries step up their efforts to improve the delivery of infrastructure services and provide shelter and business space to their citizens, various stakeholders are exploring opportunities to leverage the commonalities in these two asset classes. The changes that have been sweeping these two asset classes in the recent past are likely to take a transformative turn in the aftermath of the Covid 19 health situation. The majority of research on the confluence of these two asset classes has focussed on two streams. The first stream of research includes the urban planning aspects that investigate the impact on real estate prices with the proximity or the lack of infrastructure. This line of research has a global footprint spreading across the developed and developing countries across the globe. The second stream of research relates to the respective share of real estate and infrastructure in a multi-asset portfolio and the associated aspects of returns and defensive strategies to hedge inflation. This line of research is more noticeable in developed markets, while the investigation in the developing world is in its infancy. While these two streams continue to be of relevance going forward, the futuristic research agenda also corresponds to the (i) financialization and internationalization, (ii) value capture and business case augmentation, (iii) the role of stakeholders across the project life cycle and locations and (iv) greater geographical and regional diversity.