When real estate investors think of digital communication infrastructure perhaps the first images that come to mind are of those mobile telecom masts and data centres. However, outside this sphere, is a third category of digital infrastructure which seems to get relatively less attention.
Given the important part fibre cables play in digital infrastructure, it is surprising it is not spoken more of. As the internet grows ever more powerful fuelling business growth and personal leisure time, you would think investors in real estate assets could not afford to overlook returns from the development of the fibre network. Fibre optic cables have been around for decades, so they are not new. They are preferred to copper networks for being relatively inexpensive in comparison, and for being better at carrying signals for longer distances, while also cutting electromagnetic interference.
Perhaps it is unsurprising that very few real estate companies have a specialization in fibre cabling. After all, it does not sound like a real estate business. But one that does is Primevest Capital Partners, the Netherlands-based company which has a digital infrastructure business alongside carparks and residential property. The company launched its first Communication Infrastructure Fund in 2017 giving it a “first mover” advantage and, is launching a second fund that aims to amass up between €800mln – €1bn of assets. Primevest is involved in the “passive” layer of fibre cables meaning “all” it does is identify areas of demand, gains the necessary permissions, employs contractors to dig up the ground to lay the cable, and rents it out to an operator such as Vodafone, Deutsche Telekom or NKL on long term leases.
Frank Noé, Head of Capital Formation at the group, says: ‘Fibre optic cable is the backbone of our future economies, the backbone of growth, and decent work environments, and the very information society that the EU is striving for.’
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