Transport Infrastructure Valuations: Responding to Economic Change

After a turbulent few years marked by inflation spikes, interest rate hikes, and fiscal uncertainty, transport infrastructure is once again attracting government and private investment. But with new growth comes a familiar challenge: how to accurately value transport assets in a volatile economic landscape.

At Hickman Shearer, we’re seeing firsthand how macroeconomic conditions, from GDP forecasts to inflationary pressures, are reshaping asset valuations across the sector. This insight explores the key economic factors at play and how they’re influencing valuation decisions for infrastructure, fleets, and supporting capital assets.

Economic Context: Recovery, but With Caveats

The UK economy is showing signs of cautious recovery. The Bank of England has gradually reduced the base interest rate to 4.75% as inflation begins to fall closer to target. GDP growth, while modest, is expected to strengthen in late 2025, supported by increased public infrastructure spending and easing cost-of-living pressures.

For transport infrastructure, this creates a more optimistic outlook. Government-backed investment in rail, roads, and clean transport is ramping up, with initiatives tied to the Labour government’s National Infrastructure Strategy (NISTA) starting to take shape. Meanwhile, private logistics and fleet operators are cautiously reinvesting in assets after years of cost pressure and market uncertainty.

However, volatility hasn’t disappeared. Currency fluctuations, material shortages, and global trade tensions (particularly tariff uncertainty in post-Brexit Europe and the US-China relationship) continue to impact both project costs and investor confidence.

How These Trends Affect Valuations

1. Inflation and Cost Volatility

Inflation-linked contracts and material cost instability make it harder to assess replacement value and fair market value. In some cases, delays or cost overruns from 2023–2024 are still influencing asset performance and projected ROI.

For example, rolling stock or fleet replacement programs impacted by steel, lithium, and semiconductor price shifts may not yet reflect their full value recovery, even as demand picks up.

2. Interest Rates and Investment Activity

The recent base rate reduction has improved financing conditions, making it easier for operators to invest in fleet upgrades and digital infrastructure. However, higher borrowing costs over the past two years have left many businesses cautious. As a result, we’re seeing uneven investment recovery depending on region, asset class, and sector (e.g. passenger vs. freight).

3. Policy-Driven Shifts Toward Sustainability

Public transport upgrades, clean air zones, and incentives for electric fleet transition are all creating new valuation dynamics. Long-life assets, such as electric buses, depot infrastructure, and charging networks, must be assessed not just for current utility but long-term policy alignment and obsolescence risk.

Sector-Specific Valuation Considerations

Road Transport and Fleets

• Demand for electric commercial vehicles is rising, but secondary market volatility remains due to rapid tech change.

• Traditional diesel fleets are depreciating faster amid stricter emissions regulations.

• Valuations must now factor in whole-life costs, sustainability targets, and potential tax breaks.

Rail Infrastructure

• Projects shelved during 2023–24 are now being reassessed; updated valuations are needed for redeployment or resale.

• Electrification and station modernisation add complexity, requiring hybrid valuations that consider construction-in-progress, sunk costs, and future utility.

Ports and Logistics Assets

• Global trade friction has increased warehousing demand but added uncertainty to shipping infrastructure values.

• AI and automation in logistics hubs are enhancing asset productivity but altering traditional depreciation models.

Valuation in Motion: Why Flexibility Matters

In this evolving environment, static valuation methods won’t suffice. Transport infrastructure assets are deeply interconnected with economic conditions, and these can shift rapidly.

At Hickman Shearer, we use a combination of cost-based, income-based, and market-based approaches tailored to the unique conditions of the transport sector. We factor in current macroeconomic indicators, asset lifespan, policy alignment, and the impact of emerging technologies.

Looking Ahead

With a clearer policy direction and early signs of economic stability, transport infrastructure investment is back on the table. For investors, operators, and public bodies, ensuring assets are accurately and responsibly valued is crucial, not only for balance sheet clarity but for informed decision-making.

As we move into the second half of 2025, we’ll continue monitoring developments in trade, inflation, and infrastructure strategy to help our clients stay ahead.

Need a current valuation or strategic review of your transport assets?
Get in touch with the Hickman Shearer team today.

About Hickman Shearer

At Hickman Shearer, we specialise in delivering exceptional RICS and ASA certified capital asset valuation, management, and sales services. Our expertise span a wide range of global industries, ensuring that we provide tailored and insightful commercial valuations and equipment valuation services to meet your unique needs. With a strong track record of delivering robust and independent advice, Hickman Shearer is committed to supporting businesses in achieving their strategic objectives. Find out more here >> About Us

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