The importance of infrastructure in deciding where to live and invest
PATRIZIA Corporate Communications thought leadership lead Andrew Belt highlights the importance of infrastructure in choosing where to live and invest, using research papers and the viewpoints of PATRIZIA Head of Fund Management Infrastructure Graham Matthews and PATRIZIA Head of Fund Management RE-Infra Phoebe Smith to illustrate the point.
Having moved to Reading over a decade ago to start my career (then in local news journalism), I was keen to know what the best thing was about living in the town.
What bemused me back then now makes more sense to me now as the most popular answer was: its transport links to the rest of the country.
Back then, it gave the impression that the town had nothing to offer so residents were just happy they could easily escape to better towns and cities.
But I too grew to appreciate its proximity to the M4 motorway taking you as far west as Wales and as far east as west London, with easy access to other motorways connecting you to the length and breadth of mainland UK.
Reading’s train station as well is a large transport hub, connecting to huge swathes of England, while frequent departures for the short journey into London make the town a popular commuter area for those working in the capital.
And for journeys outside of the UK, Heathrow Airport is a little over 30 minutes away by car – again, via the M4.
The importance of good, local infrastructure
While many infrastructure considerations don’t top the list of concerns for those choosing their next home, the impact of local infrastructure is a major determinant in dictating where the best places to live are.
A 2018 study by students and professors for the Housing Education and Research Initiative (HERI) at Michigan State University was devoted to the topic. Entitled Role of Infrastructure in the Success of a Residential Development, the authors state: ‘The significance of infrastructure in a residential development cannot be overemphasized as it is critical for its success.’
With this assertion the prism through which the study proceeds, the authors then seek to identify the infrastructure priorities for residential developers and municipalities, matching the two to highlight a top five of education, utilities, employment, digital and transportation infrastructure.
These factors are deemed critical for unlocking the potential of housing developments and serving the needs and wants of residents in the local area.
To emphasise the enormity of infrastructure considerations for developers and municipalities alike, a table is shared grouping 13 core categories and 38 sub-categories. While those identified perhaps don’t fit within strict infrastructure definitions from an investment point of view (for example, retail), with real estate deemed more appropriate, it nevertheless provides a sense of the scale of associated considerations for living developments and what is required to build thriving, well-resourced communities.
The UK’s housebuilding drive versus current implementation
Taking the link a step further is Enabling infrastructure for housing – a report by global civil engineering membership organisation, the Institution of Civil Engineers (ICE). Published in July 2025, the research outlines the organisation’s position on just how important infrastructure is in delivering effective residential developments, which can boost economic growth.
Using the UK as an example, the paper examines the country’s target to deliver 1.5 million new homes and how infrastructure considerations fit into this.
The report notes how few new builds have been concentrated around existing cities, with brownfield sites preferred, and how this lends itself to a greater reliance on cars instead of public transport.
Interesting comparisons are offered between UK cities and European equivalents to highlight the so-far missed opportunity. It’s stated that Paris, Madrid and Milan have areas that are more than twice as dense population-wise than the densest part of London. Greater Manchester has 600,000 more people than Hamburg but 300,000 fewer residents within a 30-minute commute of the city centre. And while only 38% of Leeds residents can reach the city centre in 30 minutes; the proportion in similarly populated Marseille is 87%.
Meanwhile, more than 300,000 homes have been granted planning permission in London but have not yet been built, highlighting the difficulty in delivering the homes needed in the UK’s most sought-after urban areas.
With established infrastructure in and around these cities and urbanisation a megatrend now and for the foreseeable future, housing development in these areas would help to meet the as-yet unrealised demand. Such development too would likely necessitate the need to enhance the existing infrastructure and concentrate even more capital into these sought-after living locations. And as the report states, housing programmes cannot work alone, but need to work in tandem with infrastructure enhancement and net zero ambitions.
Enabling infrastructure for housing
The ICE report extols the benefits of what it calls ‘enabling’ infrastructure for housing – that is, both new infrastructure and enhancements to existing infrastructure to unlock and make the most of well-connected land for housing development. Transportation is cited as particularly important in this regard, while what are referred to as basic utilities (electricity, gas, water and digital communications) are also included as enabling infrastructure. Prosperous, sustainable communities are possible through joined-up approaches with new housing linked to good infrastructure, the report goes on to say.
To address the barriers to delivering enabling infrastructure for housing (lack of strategic planning, fragmented roles and responsibilities, planning issues/public opinion, investment gaps), the ICE proposes the following solutions:
- Adopting a more strategic approach to development
- Maximising existing infrastructure
- Unlocking investment
- Planning and public engagement.
The importance of infrastructure for housing is eloquently summarised as follows: ‘Housing and infrastructure planning need to be integrated to coordinate the public and private sectors, reduce costs and delays and ensure homes are built where they can have the most social and economic benefits.’
It’s a sentiment PATRIZIA Head of Fund Management Infrastructure Graham Matthews can agree with.
Graham Matthews
PATRIZIA Head of Fund Management Infrastructure
He says:
“The living sector does not exist without infrastructure. Better infrastructure makes for better local amenities.”
Infrastructure plans in the UK and Germany
Encouragingly, this mood music is reflected in the UK government news release announcing its 10 Year Infrastructure Strategy. In the article, published in June 2025, UK Chancellor of the Exchequer Rachel Reeves is quoted as saying: “Infrastructure is crucial to unlocking growth across the country… we’re enhancing public services, improving lives and creating the conditions for sustainable economic growth in communities throughout the UK.”
Included in the GBP 725 billion plan is GBP 1 billion for maintenance on key transport infrastructure, including bridges, flyovers and crossings, GBP 590 million to kickstart the Lower Thames Crossing (a new road connecting Kent and Essex through a tunnel beneath the River Thames) and GBP 16 billion to go towards building more than 500,000 new homes estimated to unlock over GBP 53 billion of private investment.
To zone in on the named example, the Lower Thames Crossing is expected to tackle congestion, double road capacity and improve journey times, among other benefits, which should improve the lives of those who live and work in Kent and Essex, and make the two counties more desirable living locations.
In Germany, the country’s much-publicised EUR 500 billion infrastructure fund (about which you can read more here) is modernising energy, transport, digitalisation, science, research and development, education and hospitals. It will be interesting to see where exactly the capital will be deployed, boosting local economies and being a catalyst for attractive housing opportunities from an investment standpoint, as well as from a liveability angle.
As Graham aptly puts it: “Transportation moves people and things, digital infrastructure moves ideas.” And both infrastructure sectors are critical in identifying attractive living locations.
billion GBP
The amount the British government plans to spend on infrastructure in the country over the next 10 years
billion EUR
The amount in Germany's special infrastructure fund earmarked for spending over the next 12 years
Infrastructure, locations and data insights at PATRIZIA
PATRIZIA’s Investment Strategy & Data Intelligence team embeds infrastructure factors in its location-focused algorithms. For example, in its PATRIZIA City Ranking, which ranks 142 European cities on investment attractiveness, the determinants relating to connectivity are all infrastructure-related. The fundamentals assessed are number of (airport) passengers, car-to-work ratio, average travel time to work, share of public transport and frequency of internet access. A 25% weighting of the overall assessment is given to connectivity, demonstrating the importance of infrastructure in weighing up the best cities to invest in, with the living sector a particular focus in that.
What’s interesting to note is the inclusion of housing and facets of what may typically be regarded as real estate when reading up on infrastructure research and government plans. GBP 16 billion of the UK’s overall planned spending in its 10 Year Infrastructure Strategy is earmarked for housebuilding. The lines between the real estate and infrastructure asset classes are clearly blurred and with the ICE proposing more joined-up thinking incorporating infrastructure to yield the best outcomes for housing development, combined expertise could be the way to unlock this potential in future.
An eye to the future
The notion is in line with PATRIZIA’s own conviction in RE-Infra, whereby the convergence of real estate and infrastructure is consolidated into combined investment propositions. With many stakeholder groups involved in housing development, a combined RE-Infra approach can streamline the investment aspect, utilising expertise across both asset classes to deliver holistic solutions. And at scale, this can feed into the development of smart cities.
Phoebe Smith
PATRIZIA Head of Fund Management RE-Infra
“With an integrated real asset platform that combines real estate and infrastructure assets into a common strategy, the value chains of both asset classes can be combined to create value and leverage synergies at every stage of the investment lifecycle.”
The more importance shone upon infrastructure, the more it can be part of the picture and improve the homes and cities in which we live and invest.