Harnessing the power of public-private-partnerships to maximise Europe’s infrastructure opportunity

We are in the decade of infrastructure modernisation. Germany and the UK are taking the lead in Europe with their respective EUR 500 billion and GBP 725 billion infrastructure investment strategies. German Chancellor Friedrich Merz and British Chancellor of the Exchequer Rachel Reeves generated big headlines when announcing their huge public investment programmes, and citizens in both countries now await a clear roadmap for delivery.

These large investment volumes are sorely needed with a study at the end of 2024 suggesting that Germany needs EUR 400 billion to renew its crumbling infrastructure, while, around the same time, EY calculated that the UK’s infrastructure funding deficit stood at a staggering GBP 1.6 trillion.

For PATRIZIA and other real assets investment managers, therefore, now is the time to engage both governments. We have more than 25 years’ experience of managing infrastructure investments and more than 40 years in managing real estate across Europe and beyond, and we are ready to boost the public infrastructure programmes in our home market as well as in the UK – our international hub for global investments.

As highlighted in our estatements article on the topic, public-private partnerships (PPPs) will be a crucial instrument to leverage public infrastructure programmes to create a strategic impact on modernising European society and its economy.

Together, we can amplify spending across key areas such as transport, mobility, digital infrastructure, the energy transition and the critical task of modernising Europe’s built environment to accelerate progress towards affordable housing, modern living and building sustainable communities.

The German government has released the debt brake and is developing a plan for the execution of its special infrastructure fund, while in the UK, the government wants to bring in private finance and expertise to help with its ambitions.

As always, the devil is in the detail though and we will engage early with key decision-makers to leverage private capital for this unique investment opportunity – a point strongly made by the German Public-Private-Partnership Association shortly after Chancellor Merz’s announcement.

We are on the cusp of an infrastructure boom, which we hope catches fire across the rest of the continent, boosting our economies across Europe.

This cannot just be headline-grabbing statements of intent but must translate into real action to renew the European living and infrastructure landscape.

Digitalisation is key for modernisation

Both public investment plans support the digital transition of our economies and societies, which is the special focus of this estatements magazine.

We are actively driving the digital transition as you will read in this issue.

Our Head of Investment Division James Muir provides great insights on PATRIZIA’s digital heritage and role in applying digital solutions to real assets. And our Head of Fund Management RE-Infra Phoebe Smith explains how we are driving forward the digital transition, with our focus on data centres creating value through infrastructure and real estate investments.

We also look at the fast-emerging Cooling-as-a-Service (CaaS) infrastructure investment opportunity and our own such investment in Asia-Pacific. And finally, we focus on the digital tools which provide insights into our investments in the living sector.

Talking digital, this is our first digital-only edition of our client magazine, and we will deliver this format more frequently in our client communications moving forwards.

Please enjoy reading our insights and I hope it captures your imagination in relation to your own digital transition investment activities.