Infrastructure

Considerable yield compression has occurred in many international bond and fixed-asset markets in recent years, resulting in large capital flows into property. With the increased level of investment capital available, pension funds and institutional investors have considered a range of alternative investments including infrastructure to enhance the performance and provide diversification benefits in their portfolios. Infrastructure involves the physical structures and networks that provide the essential services for a community’s economic and social needs (RREEF 2005; McCarthy 2006). Infrastructure is fundamental to a country’s economy. Effective infrastructure is essential for economic growth and competitiveness. The size and quality of infrastructure is highly correlated with the size of a country’s economy (Hobbs 2007; Newell and Peng 2008a, b). In a Chinese study, infrastructure quality highly correlates (r=0.92) with global competitiveness (Newell, Chau, and Wong 2009)