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The infrastructure REIT opportunity: Massive investments will be required to usher the 5G era
- March 1, 2020: Vol. 7, Number 3

The infrastructure REIT opportunity: Massive investments will be required to usher the 5G era

by Mike Consol

Over the next decade, wireless applications powered by fifth-generation (5G) network technologies are expected to disrupt nearly every sector of the economy, requiring massive investments in communications infrastructure. Cell tower and data center owner/operators will be key beneficiaries of 5G-related spending, providing critical assets to carry economies into the next digital era.

That is the assessment of a white paper produced by Cohen & Steers, which asserts that — just as 4G wireless broadband paved the way for smartphones — 5G technology with its faster speeds, will pave the way for the vastly greater data needs of autonomous vehicles, smart cities, smart manufacturing, agricultural monitoring and augmented reality.

The long-term opportunities for infrastructure investors are manifest.

“These sectors have grown to become a significant portion of the public markets today, highlighting the evolution of investable properties tied to the information economy,” the report reads. “Within real estate portfolios, we believe the growing influence of secular themes — whether technology, logistics or demographic trends — may be shifting the REIT market to become less sensitive to economic cycles. This could enhance the potential of REITs to serve as portfolio diversifiers, particularly in periods of economic uncertainty.”

Among the promising 5G economy REITs cited by the report were:

  • American Tower, which has surpassed Simon Property Group as the world’s largest REIT by market capitalization
  • Crown Castle International, with roughly 40,000 communication towers and 60,000 route miles of fiber across the United States
  • SBA Communications, owner of tower assets in all 50 U.S. states, throughout Canada and in Central and South America

Cohen & Steers suggests REITs of this kind are particularly appealing for investors seeking to create a diversified infrastructure strategy. The full eight-page report, titled Infrastructure REITs Towering Over the 5G Economy, can be read at this link: https://bit.ly/317QP5P.

 

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.

 

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