Infrastructure Trusts Are on Sale – But Should You Buy?
A dive into why UK-listed infrastructure trusts are trading at historic discounts—and where long-term investors might find value in 2025.
The Changing Face of Infrastructure Investing.
For years, infrastructure funds have been the quiet achievers of the UK investment landscape. From HICL Infrastructure and BBGI Global Infrastructure to Greencoat UK Wind and The Renewables Infrastructure Group (TRIG), these funds have offered investors a way to access the backbone of the economy—roads, schools, wind farms, and digital networks—while aiming for steady, inflation-linked returns.
Yet, as we move through 2025, the landscape for infrastructure investing continues to evolve amid a backdrop of elevated interest rates—still higher than much of the past decade, though recently easing from the peaks of 2024. Share prices for many listed infrastructure trusts are trading at unusually wide discounts to net asset value (NAV).
I recently covered this in more detail in my latest article on HICL Infrastructure, which is currently trading at a 25% discount to NAV.
So, what’s really happening beneath the surface—and where do the best opportunities (and biggest risks) lie for investors?
The Interest Rate Challenge: Why It Matters
Infrastructure assets are often compared to bonds because they generate long-term, predictable cash flows. When interest rates rise, the present value of those future cash flows falls, and so do the share prices of infrastructure funds.
In the past 18 months, the average discount for UK-listed infrastructure funds has widened sharply. HICL Infrastructure and BBGI, for instance, have seen their discounts to NAV move from near par to as wide as 15-20%. Even Greencoat UK Wind, with its inflation-linked revenues from wind farms, has not been immune.
“Share prices have been buffeted by market volatility and investment flows. It’s not obvious how the likes of Greencoat UK Wind are affected by tariffs or a recession, yet the share price has taken a hit”.
— William Heathcoat Amory, Kepler Partners
Why Are Discounts So Wide?
Rising Gilt Yields: As UK government bond yields have risen, infrastructure funds have had to increase the discount rates they use to value their assets, lowering NAVs.
The 10-year gilt yield has risen over the past 12 months:
Investor Sentiment: Higher rates have made the 5-7% yields on infrastructure funds look less attractive relative to cash and gilts, leading to outflows and wider discounts.
NAV Lag: Unlike equities, many infrastructure assets are valued quarterly or even less frequently, so NAVs can lag behind real market conditions.
Beyond the Discount: Policy, Private Capital, and the Next Wave of Infrastructure Opportunity
While the sharp widening of discounts has been a defining feature of the past 18 months, it’s only one part of a much bigger story. The UK’s infrastructure sector is now at the centre of a generational investment drive, fuelled by both public ambition and private capital.
A National Priority with Global Attention
The government’s long-awaited National Infrastructure and Construction Pipeline, published in early 2025, outlines more than 660 projects and up to £775 billion in planned investment over the next decade. This commitment spans everything from energy transition and digital connectivity to healthcare and housing. The aim is not just to “build back better,” but to future-proof Britain’s economy and society.
This renewed policy focus is already drawing fresh attention from global investors. The recent all-cash takeover bid for BBGI Global Infrastructure by a Canadian pension fund—at a 21% premium to its share price—serves as a striking endorsement of the value international buyers see in UK-listed infrastructure trusts trading at discounts.
BBGI 1 yr share price chart:
As Andrew Gill, co-manager of TIME:UK Infrastructure Income, notes, “UK infrastructure investment trusts continue to provide robust and growing income... with many dividend yields for diversified and renewable infrastructure trusts typically ranging from 7%-11%.”
Sector Opportunities: Where Growth and Resilience Meet
Despite these challenges, the underlying investment case remains compelling—especially for investors willing to look beyond the noise and focus on long-term trends:
Healthcare Infrastructure: With the NHS modernisation agenda and a shift towards community-based care, listed funds that own GP surgeries and healthcare facilities are well-placed for expansion. Examples include:
Assura plc (LSE: AGR) – Specialises in primary care medical centres leased mainly to the NHS.
Primary Health Properties (LSE: PHP) – Owns a large portfolio of modern GP surgeries and primary care facilities across the UK and Ireland.
Impact Healthcare REIT (LSE: IHR) – Invests in care homes and healthcare facilities, with long leases and inflation-linked rent reviews.
Digital Infrastructure
Trusts and funds in this sector invest in data centres, fibre networks, and digital connectivity assets:
Cordiant Digital Infrastructure (LSE: CORD) – Invests in data centres, fibre, and broadcast towers across the UK and Europe.
Tritax Big Box REIT (LSE: BBOX) – While best known for logistics, it is involved in large-scale data centre developments, such as in Slough and Buckinghamshire.
Green Energy:
The UK’s net zero commitments and growing demand for clean power continue to drive investment in renewables, with listed funds offering exposure to wind, solar, and bioenergy assets:
Greencoat UK Wind (LSE: UKW) – The UK’s largest listed wind energy fund, focused on operational onshore and offshore wind farms.
The Renewables Infrastructure Group (LSE: TRIG) – Diversified across wind, solar, and battery storage projects in the UK and Europe.
Foresight Solar Fund (LSE: FSFL) – Specialises in large-scale solar power assets with inflation-linked revenues.
Public-Private Partnerships:
Modern PPP models allow investors to access essential infrastructure with government-backed contracts, spanning sectors like transport, education, and utilities:
International Public Partnerships (LSE: INPP) – Invests in a broad range of UK and global infrastructure projects, including schools, transport, and energy networks.
HICL Infrastructure (LSE: HICL) – Focuses on social and economic infrastructure, such as hospitals, roads, and government buildings, often under long-term contracts.
Conclusion
Infrastructure trusts in the UK are at an interesting moment. Despite recent headwinds from higher interest rates and market nerves, the core story hasn’t changed: these funds own the assets that keep the country running, and many now offer unusually high yields and deep discounts.
With the government ramping up investment in everything from green energy to digital networks, and private capital eyeing bargains, there’s real potential here for patient investors. The combination of steady income, inflation protection, and exposure to Britain’s long-term priorities makes this sector hard to ignore right now.
Let me know which investment trusts you own or are watching!
Thanks,
Ollz
The information provided in this article is for informational purposes only and represents my personal opinions and analysis. It should not be construed as financial advice or a recommendation to buy or sell any securities. Investing in the stock market carries risks, and past performance is not necessarily indicative of future results. Readers are strongly encouraged to carry out their own research and seek advice from a qualified financial advisor before making any investment decisions. I do not accept any responsibility for any financial losses or consequences that may arise from reliance on the information presented in this article.
Impact Healthcare REIT is no longer! It changed name to Care REIT late 2024 and was then bought by CareTrust REIT in March 25. CareTrust REIT (CTRE) is US listed on the NYSE.