The Property & Infrastructure Fund returned -0.8% in December, compared to its benchmark of -0.7%.

Napier Port (+20%) reported full-year 2025 financial results during the quarter, with 36% earnings growth during the year. Earnings growth was driven by a combination of pricing gains, volume growth and operating efficiency. Average pricing lifted 9% in the container business and 7% in the bulk business. Container volumes lifted 9% and bulk volumes declined -2%. The business experienced significant headwinds from Cyclone Gabrielle in 2023 yet used the crisis as an opportunity to reset the cost base and improve operational efficiency, which is now bearing fruit. Whilst the result was in line with expectations, it shows continued execution and the market rewarded by decreasing the valuation discount to peer Port of Tauranga (+3%).

Groupe ADP (-12%) experienced a rollercoaster month, at one point up +4%, before selling off late in the month. This reflects a sharp change in expectations for regulated profits at its main Paris airports business. Early in December, the company announced its proposal for a new eight-year regulatory period (2027–2034), with significant new investment and robust above-CPI price rises. Groupe ADP expected a higher regulated rate of return, partly due to the long tenure of the period of the plan. Within a week, the regulator released its decision for the company’s 2026/2027 pricing. The regulator rejected the company’s proposal and changed the way some costs were treated, effectively reducing the prices and profits in the regulated business in Paris. This clearly has negative implications for the 2027–2034 regulatory plan. We bought shares during the month given favourable valuations (the market values the regulated business at a significant discount to asset value) and we anticipated a positive regulatory outcome.