Valuation of Infrastructure Assets Q1 2025

Portfolio Manager, Simon Ong, discusses the latest trends affecting the infrastructure asset class and reviews current valuations.

Key Takeaways

• Infrastructure positioned defensively amidst U.S. tariff uncertainty and market volatility

• Strong share price performance in Q1 2025, but valuations still remain attractive

• Fundamentals for most sub-sectors remain resilient:

  • Electric Utilities – Minimal direct exposure to tariffs. Companies continue to secure new business tied to AI/data centre growth, particularly in North America and Europe.

  • Energy Infrastructure – Gas pipeline assets continue to expand to support higher power needs from data centres, coal-to-gas switching, and LNG exports. Oil and gas flows between Canada and the U.S. are exempt from tariffs due to USMCA.

  • North American Freight Rails – Strong volumes in Q1 2025, due to pull forward of demand ahead of U.S. tariffs. However, shipments from China to U.S. ports have dropped significantly since trade escalations in April 2025. Outlook for rest of 2025 depends on trade negotiation outcomes, with a trade deal with China a positive catalyst.

  • European Airports – EU inbound market is strongly increasing, with May-June 2025 travel +7.3% YoY. Transatlantic route mixed, due to aversion to travel to the U.S. EU-U.S. inbound/outbound +2.1%/-2.4% YoY, respectively.

  • Toll Roads – Inelastic demand response to strong price hikes in relevant North American markets, including Toronto, Dallas Fort Worth, Virginia, and North Carolina, highlighting the value of time saved by using toll roads in congested markets.

  • Renewables – Expect resolution for the fate of U.S. renewables tax credits in coming months as budget reconciliation process unfolds. Either way, growth prospects for onshore wind and solar remain unchanged and are largely driven by state-based targets and economics.

For the complete Valuation Presentation Pack, please contact our Distribution Team.