Infrastructure - noun. The basic physical and organisational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise. 'The social and economic infrastructure of a country'' – (Oxford Dictionary).
Infrastructure development is a key contributor to economic growth in a region or country and the rationale is generally focused on improving the efficiency of commerce within an economy, particularly in relation to transport and communication projects. Transportation systems, strong telecommunications systems (including high-speed internet capability) and reliable appropriately-priced energy are considered fundamental to all real estate strategies.
Successful infrastructure development is development which boost productivity and provides sustainable economic growth and critical to this is in the timing and appropriate scale of projects.
The Australian Federal Government’s Infrastructure Priority List - a critical reference point for the most important infrastructure investments in Australia over the next 15 years - is weighted to Hard Infrastructure (highways, bridges, roads) and Critical Infrastructure (agriculture, telecommunication, energy) whilst State Governments, especially NSW, are making progress on Soft Infrastructure (health, law enforcement, education).
Australia is currently experiencing an almost unprecedented infrastructure boom. Billions of dollars across a multitude of projects and multiple sectors either in planning or under construction are being invested across the country. Therefore, it is crucial that real estate investors have an in-depth understanding of the positive and negative impacts of this development on their investment. The impact of infrastructure on real estate is generally easy to read (at least in hindsight) and for the most part can have positive attributes.
However, the impact of infrastructure projects can be complex. For example, in areas where development results in the loss of property values, it is important that investors are adequately informed to make sound decisions. To ensure success, investors need to understand the relationship between politics, planning, design, construction, community concerns and finance.
Each opportunity must be analysed on an individual basis using market intelligence along with the latest mapping tools and robust data to help inform the right strategy.
Over the next few weeks our experts will be exploring some of the complexities of infrastructure development using contemporary case studies in Australia. Our aim is to make all of our readers infrastructure experts. Topics will include Inland Rail and logistics strategy, the impact of rail investment and the rise of intermodal facilities, leveraging infrastructure to maximise value, Western Sydney airport at Badgerys Creek and over station development and metro transit.
We hope you enjoy the series, welcome to The Infrastructure Expert!
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