Better Together: Where Infrastructure and Real Estate Converge
Two sectors. Complementary strengths. One real assets strategy.
The line between infrastructure and real estate has been blurring. Two sectors once managed separately have become increasingly linked across the built environment—and for investors, that convergence could be the opportunity.
1. Same DNA, Different Cycles
Infrastructure and real estate are both hard assets, historically inflation-sensitive, and typically income-generating. Where we believe they diverge is in return profile: Infrastructure tends to lean on contractual cash flows, real estate on cyclical appreciation.
Figure 1
Infrastructure Anchors, Real Estate Grows— A Compelling Combo1
Sources: MSCI-Burgiss, Preqin, Hines Research. As of 3Q 2025, the most recent data point available, for
the trailing 15-year period.
Key figures: Global private infrastructure has historically delivered ~12% IRR with ~2.5% annualized volatility. Global private real estate has delivered ~14% IRR with ~3% volatility (trailing 15-year average annualized, as of 3Q2025)—a differentiated but complementary profile (see Figure 1).
Takeaway: The two sectors are not competing allocations. They are complementary positions within a single real-assets strategy.
2. Capital Has Been Shifting
Infrastructure and real estate have both been attracting capital, and for different reasons. The data show that a shift could be underway.
Figure 2
Fundraising Pick-Up
Sources: Preqin, Hines Research. As of 2Q 2026 but using only complete calendar years, so ending
with 2025.
Key figures: Global infrastructure fundraising reached its highest level relative to other private asset classes in 2025. Private real estate fundraising also inflected upward as investors began moving back into a sector that had undergone two years of significant repricing (see Figure 2).
Takeaway: Capital has been rotating into real assets from both directions simultaneously. We believe that creates a window where infrastructure’s stability and real estate’s recovery upside could be available at the same time.
3. Better Together
Combining infrastructure and real estate has historically produced stronger risk-adjusted outcomes than holding either in isolation. Infrastructure can offer resilience, while real estate is expected to offer recovery-driven upside (though the pace and magnitude are expected to vary by sector and geography).
Figure 3
Stronger Returns, Lower Volatility, Together2
Sources: MSCI-Burgiss, Preqin, Hines Research. As of 3Q 2025, the most recent data point available, for
the trailing 15-year period.
Key figures: The 50/50 blend of infrastructure and real estate delivered a trailing 15-year IRR of ~13% at ~2.5% volatility. That sits above infrastructure-only on return, and well below global private equity on risk (see Figure 3).
Takeaway: Combining real estate with infrastructure could improve return potential while only modestly increasing volatility.
4. The Boundary Has Been Fading
The convergence of infrastructure and real estate has been visible across sectors, representing a growing share of where institutional capital has been deployed.
Figure 4
Where We See Convergence
Takeaway: The most compelling opportunities in real assets have been increasingly emerging where infrastructure and real estate converge (see Figure 4). We believe the investors best positioned to capitalize are already operating across both.
Construction/Supply Has Been Retreating While Demand and Opportunity Have Been Building
Hines View
“Infrastructure and real estate have been increasingly linked across the built environment. Investors who treat them as a single real-assets allocation, rather than competing categories, could be better positioned to capture resilience, income, and recovery-driven growth simultaneously.
– David Steinbach and Michael C. Hudgins
Where Hines Sees Opportunity
- Durable income and inflation protection from infrastructure holding firm through market uncertainty
- Recovery upside potential in repriced real estate, backed by constrained supply across key sectors
- Structural growth potential across digital infrastructure, powered land, logistics, and social infrastructure