First Sentier Investors recently released their global listed infrastructure outlook and sector review. The reports states that traffic volumes remain resilient for European, Asia Pacific and Latin American toll road operators compared to those of other transport infrastructure assets.
Many toll roads have concession agreements that specify how prices can be increased, with the option to either follow the inflation rate or an agreed percentage — whichever is higher. As a result, they are likely to fare relatively well in a higher-inflation environment.
According to the report, lack of capacity in the trucking sector (freight rails’ main competitor) and the onshoring of industrial production back to the United States are expected to provide additional drivers of demand for large-cap North American freight rail operators, which are unique and valuable franchises, with wholly owned track networks. They typically operate under duopoly market conditions, with significan
