In a market where it is increasingly difficult and expensive for investors to buy mature core infrastructure assets, building one from scratch or redeveloping an existing asset is another option.

Build-to-core can be a viable strategy if executed correctly, believes Recep Kendircioglu, senior managing director with John Hancock Financial Services and leader of the power and infrastructure group. “It is clearly less expensive to build than buy core assets in today’s market, but the strategy comes with higher risk and the need for experienced oversight,” he says. Kendircioglu also serves on the board of the Long-Term Infrastructure Investors Association.

One advantage of the strategy: Fewer players are looking at greenfield opportunities at this point in the cycle, and it is possible to find better risk-adjusted returns, Kendircioglu notes. The development timeframe might be long and costly, however, and the strategy is quite labor-intensive and requires a speciali