With the chatter and focus this month being on Heathrow, something on the topic of infrastructure in general seemed appropriate for October.

With that in mind - there’s an important distinction to make here. It is the use of the word “large”, and whether it is comparative or absolute. The spoiler is - comparative is much more use to you, and I, as property investors. Do we prefer an infrastructure project of £1bn, regardless of the location, or a set of projects adding up to £1.5bn (over the same time period) - or another project or set that add up to £300m but with a much smaller radius of influence?

The answer is the latter. When researching infrastructure projects, in my opinion, the important metric is spend per “relevant” capita. Think of what happens when a massive project gets underway - let me pick on Hinckley Point in Somerset, because I’ve invested in Bridgwater, and know a fair amount about the area and the project specifically.

There’s the project itself - of course. They say the average Government infrastructure project goes 66% over time and 75% over budget (just imagine what that changes to when the HS2 figures are included). This is the thing everyone concentrates on. Bridgwater becomes a town of short-stay accommodation, regardless of what E.On and the likes try to do (for example, they leased an entire holiday park, but the feedback as I understand it is that it isn’t “liked” and feels like living in a ghost town). There’s supernormal profits to be gained from short-stay accommodation that isn’t short stay, but the tenants have their own houses they can go back to at the weekend, so there is less wear and tear on the property and they are effectively on licence (lower credit risk etc).

The average length of stay is more like two years, and it makes you chuckle when you get certain trades in who are on a 7-year contract when the official line on the project at the time is that there is about 3.5 years left to go. You can understand why everyone has their eyes on that. But it is more complex than that. Some surrounding towns have not done so well from the project - all the money is in Bridgwater, so if you want a high street unit/shop you are much more likely to go there than somewhere nearby. All the foot traffic is there. Other surrounding towns sometimes become more ‘sleepy’.