Swiss Life Asset Managers is taking a co-controlling equity stake in Telecom Infrastructure Partners, a global lease aggregator of telecom sites in Europe and Latin America.
With mobile telecom sites touted as a key component of the digital infrastructure landscape, Swiss Life Asset Managers is not only taking a co-controlling stake alongside founding infrastucture manager, InfraBridge, but is also including growth equity.
Telecom Infrastructure Partners was only established in 2021 by InfraBridge, and is headquartered in London. It operates a global lease aggregation model targeting telecom sites with triple net lease agreements from individual landlords, granting the company long-term revenue streams for periods of 30 to 50 years. It now has 850 leases and plenty more in the works.
On its website, Telecom Infrastructure Partners says property owners sell all, or part of, their mobile site lease for two reasons - to minimize risk and to maximize returns.
It says mobile (cell) site leases differ from other types of commercial property leases in one important way: unlike a “regular” commercial property lease, mobile site leases can be terminated by mobile operators or an infrastructure company with very little notice - usually 30-90 days.
'Although the mobile site rent you receive is an attractive source of ongoing cash flow, property owners really do not have control over it. Over time, the cash flow may stop if the mobile operator or infrastructure company decides to terminate. And even if it continues, mobile operators and infrastructure companies often seek rent reductions. At best, site rent keeps up with inflation.'
On the demand-side, it says mobile networks require an 'ever-expanding' number of locations. At first, networks grew along with their subscriber base. Thereafter, successive technologies required densifying networks. Telecom operators and infrastructure companies simply could not afford to buy rather than lease many thousands of cell sites.
Moreover, leasing space gives telecom operators and infrastructure companies much-needed flexibility: while networks will always require cell sites, the types of sites and their location might change. For example, the fifth generation of networks also knows as “5G” often relies on small antennae covering a small cell which may be located on light poles or the walls of buildings. Larger “macro” sites seen on masts, rooftops and structures, may be decommissioned.
Gianfranco Saladino, head value-add infrastructure at Swiss Life Asset Managers, said: 'The North American example has shown the true potential of land lease aggregation'. He added that Telecom Infrastructure Partners' global expansion would be 'fast-tracked'.
InfraBridge's managing partner, Damian Stanley, said, 'This transaction is testament to our belief in the company's potential and attractive position in the market.'
Closing of the transaction remains subject to customary regulatory approvals and is expected to close by 2Q 2024.
