The Property and Infrastructure portfolio returned +0.9% in May, ahead of the benchmark index which declined -1.0%.

Infratil shares rose +26% in May as its data centre subsidiary, CDC, secured a landmark 555MW contract with a major U.S. hyperscaler. This agreement, the largest in Australian history, accelerates CDC’s path to over 1GW of contracted capacity and underpins new guidance for FY28 EBITDAF to exceed A$1 billion. Market enthusiasm was further bolstered by Anthropic’s expansion into Australia and broad-based AI infrastructure demand, which led management to increase FY27 capital expenditure forecasts to support a 2.9GW development pipeline. Beyond data centres, Infratil’s FY26 results highlighted a meaningful earnings uplift at Longroad Energy, which is now pursuing its own 4GW data centre co-location strategy. Infratil also sold $495 million of shares in Contact Energy to help fund growth in other parts of its portfolio. We remain confident in the investment outlook for Infratil, particularly CDC.

NextEra Energy was a top detractor in May, returning -11% after announcing a $67 billion all-stock acquisition of Dominion Energy. While the deal establishes a premier platform in Virginia’s "Data Center Alley" and raises long-term EPS growth guidance to 9%+, the market reacted poorly to the strategic shift. Investors expressed concern that the transaction dilutes NextEra’s high-quality Florida utility and competitive renewables narrative with lower-quality regulated earnings. The transaction carries execution risk, as the merger requires complex multi-jurisdictional approvals and includes a $4.8 billion regulatory termination fee. We believe the sell-off is overdone. NextEra is taking advantage of a large valuation spread to acquire a business at an attractive price that is immediately accretive to shareholders, before considering synergies. Further, it increases the regulated portion of earnings, increasing its ability to borrow to invest at high rates of return in its unregulated business, where it is seeing accelerated demand from datacentres and decarbonisation.