Europe Brownfield Outlook 2019: Core and non-core opportunities

17 December 2018 - 12:00 am UTC

Europe’s brownfield infrastructure finance sector (excluding renewables) had reasons to celebrate in 2018. Deal volumes in the sector rose by just under 5% to EUR 87bn. Core infrastructure sectors remained buoyant, with some 40 transactions reaching financial close in 2018 in the power sector, comprising energy transmission and commodity storage. 2018 was also a big year for investing by infrastructure funds in telecoms. Some 40 M&A transactions involving data centres, towers and fibre assets reached financial close in 2018, while a further 15 progressed but are yet to close, a significant increase year-on-year.

This trend is expected to continue in 2019.

European governments and mobile network operators (MNOs) are preparing for the introduction of 5G – a sector which infrastructure funds are also keeping a close eye on. Key milestones are expected to be reached in 2019.

5G – which experts claim will increase download speed of mobile phones from 50 megabits per second today to 5,000 megabits per second – will require considerable investment in new fibre networks and towers. While 5G-capable handsets are being readied for launch in 2019, they are not realistically expected to be operating at the faster speeds until these additional networks are up and running.

This will take a while, but infrastructure funds familiar with the digital sector will be looking closely at any opportunities.

One obvious opportunity will be for them to co-finance MNOs’ new 5G infrastructure. “There is a gap in the market. MNOs don’t have the cash to fund 5G,” said one sector advisor.

Investors are also expected to work hand in glove with European governments that are leading the way in 5G trialling. The UK government is currently trialing 5G in the West Midlands by live streaming of CCTV footage from public transport buses and video conferencing between paramedics and clinical specialists. Infrastructure funds are understood to be looking to invest in this and other similar schemes.

5G aside, infrastructure funds in 2019 will also be keeping a close eye on BT Group’s plans for its fibre-specialist Openreach business. Valued at over GBP 25bn, this will dwarf all other deals by Infrastructure investors to date.


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