Building at the Intersection of Real Estate and Infrastructure

Canada’s infrastructure build-out is accelerating. And it’s creating new investment, development, and operating opportunities for those real estate companies breaking through their traditional industry boundaries. The organizations seizing new sources of growth are overcoming the constraints that historically kept many confined to more traditional asset classes—and are moving into territory no single organization can claim alone.

Three forces emerged across this year’s interviews: power and compute, national defence and resilience, and demographics and care. Real estate underpins all three. Together, they form an investable thesis for the year ahead.

An Oxford Economics forecast prepared for PwC projects Canada will need US$4.7 trillion in infrastructure investments by 2050. These requirements span not just traditional civil works, but also data centres, defence facilities, and health care. Many of this year’s interviewees see a central role for real estate companies in the delivery of these complex projects. “There’s significant opportunity in infrastructure and infrastructure-like assets,” one said.

Infrastructure-style returns have largely outperformed core real estate in recent years. The assets powering that performance share distinct traits. Contracted cash flows that extend over decades, rather than traditional lease cycles. Operational intensity. Demand underpinned by shifting structural forces, such as technological disruption, geopolitical tensions, and changing demographics. 

Not all of those performance traits point in the same direction. Lower federal immigration targets, for example, are weighing on demand for student housing in the near term. Should those levels recover, student housing could re-emerge as one of the sectors where demographics-driven demand meets real estate. 

Real estate paired with infrastructure-adjacent assets can embed these traits and attract additional sources of capital—especially with hundreds of major projects planned or under construction across Canada.

Many opportunities in the next real estate cycle won’t live neatly within standalone asset classes. Consider some of the areas highlighted by interviewees. Data centres and the race for power. Defence spending and its spillover into industrial and residential real estate. And the expanding ecosystem of care-adjacent assets anchored by senior housing. Each represents a distinct intersection of real estate and infrastructure. And each comes with binding constraints. The organizations first to solve them will position themselves to lead in 2027 and beyond.

Data centres have moved from a niche real estate play to a core asset in the eyes of some—but not all—interviewees. Others view data centres as their own asset class entirely. Demand is surging for the computing power needed for AI applications, cloud migration, digital government services, data sovereignty requirements, and the broader digitization of the economy. PwC’s infrastructure forecast projects Canada will invest US$54 billion in data centres between 2025 and 2050. One interviewee named data centres their primary growth driver, while another named them their top bet heading into 2027.

Developing data centres is not an opportunity open to everyone. Interviewees from two financial institutions said success depends on operator quality, sponsor strength, and careful deal structuring. Other interviewees expressed outright skepticism, with one investor arguing data centres are not real estate at all, pointing to limited tenant liquidity and the possibility that new technologies could eventually make today’s facilities obsolete. Combined with the size, complexity, and capital requirements of data centre developments, the investment case is a disciplined infrastructure thesis, not a universal buy signal. 

Among the challenges constraining data centre development in Canada, interviewees frequently raised power availability. That sentiment is echoed in PwC’s Global Data Centre Outlook 2026–50, which found transmission capacity, substation availability, and multiyear transformer lead times are bottlenecks that determine which projects break ground and when. Power is also where new opportunities are forming—not only for those building data centres, but also for those who can help solve the power constraints hindering the ambitions of some data centre proponents. One interviewee framed power availability as a new form of zoning. For real estate organizations, the opportunity isn’t generating power—it’s securing the land where power is available.

This increasing energy demand is highly visible at the local level. In Ottawa, for example, the local utility has said connection requests from large-scale projects, many of them data centres, could soon exceed the city’s entire current power use by residents and businesses combined. An analysis by PwC Canada’s real assets practice suggests that by 2040, the structural supply gap in Ontario alone will likely reach 68 terawatt-hours—equivalent to roughly 45 percent of the province’s current annual output.  

The constraint runs deeper than simple scarcity. Ontario, for example, is emerging from a 15-year period of flat electricity demand, leaving grid operators, developers, and supply chains to manage a sudden uptick after a long period of inactivity. Data centres are competing with other users for power as electrification increases demand across homes, vehicles, and industries. Expanding the grid to meet this growing demand will take years and significant investment. On top of that, data centres require near-constant uptime, which favours steady sources of power, such as nuclear or natural gas, over intermittent renewables such as wind or solar. 

Then there’s the question of who pays for it all. Canada’s new responsible data centre development principles are blunt: data centres must not shift electricity costs to Canadians. Navigating the power constraint requires a series of deliberate choices. The first is jurisdiction: provinces with more abundant power supply, and less strain on their grids, offer an easier path than those already stretched thin. Market structure matters too. In more liberalized power markets such as Alberta, developers can negotiate direct agreements with power generators. In more tightly regulated markets, all power must flow through a central utility, leaving little room to strike independent deals. 

Some organizations are taking a more direct approach and building their own power supply. In Alberta, one large technology company is pairing its planned data centre with a dedicated natural gas plant built specifically to serve it. The provincial government has urged other developers to do the same. Ontario has signaled a similar direction, encouraging data centre developers to build their own power-generation facilities.

New ideas for overcoming electricity constraints are also emerging. One concept is to make use of power that already exists but cannot reach the grid. Some power generation, particularly from renewable energy projects, can occasionally be curtailed when local transmission lines are too congested to carry it. One idea being explored is to place a data centre directly beside that stranded generation, paired with battery storage to manage the natural gaps in renewable output. Connecting the two directly could let a data centre bypass the grid entirely. 

For real estate organizations, this focus on power proximity can reshape the value of their properties. The opportunity comes from securing the physical sites where that power is accessible.

One industrial landowner whose properties sit near grid connections is converting them into micro data centre facilities. Another interviewee said they hold employment land where data centres are a permitted use and anticipates the local utility bringing hundreds of megawatts of capacity to their site. Others are repositioning entire portfolios: one interviewee said they’re converting logistics land for data centre use and using existing industrial assets as a platform for energy generation and technology services. Another is looking at power-served industrial sites and hyperscale-adjacent submarkets where demand is rising fastest. 

Real estate organizations can’t overcome power constraints on their own. Technology companies and power generators are typically at the centre of negotiating power supply. For real estate organizations, this creates pressure to define their roles within these partnerships and an opportunity to put forward vital pieces of a solution.

PwC’s infrastructure forecast projects Canada’s data centre buildout will be concentrated in the coming years, peaking in 2029. Real estate organizations have a short runway to act—or risk missing out on their share of Canada’s multibillion-dollar data centre opportunity. 

Defence spending in Canada is growing sharply. The question for real estate companies is where opportunities will emerge. PwC’s infrastructure forecast projects Canada will invest US$89 billion in defence infrastructure between 2025 and 2050—a 389 percent increase in annual spending, which makes defence the fastest-growing segment of the country’s infrastructure buildout. While the immediate opportunities are highly localized, one pension fund interviewee said they view defence spending as a potential broader catalyst that could span industrial logistics, residential development, and workforce housing.

Some see opportunity. Others see uncertainty. Defence-linked demand remains an investment thesis in progress rather than a settled consensus. On the industrial side, it’s too early for most to tell when or how proposed federal spending will translate into concrete real estate requirements. Organizations are responding to this uncertainty in different ways. One pension fund said they see an opportunity to position developable land ahead of the procurement cycle. And one developer said their employment lands are already drawing interest from defence-related manufacturers. Yet others are skeptical. One developer said they’ve seen no local impact from defence spending, while another doubted that proposed investments would reach a scale sufficient to affect overall demand for industrial properties.

So how can real estate organizations position themselves to capture demand that hasn’t yet materialized? One pension fund said their strategy is to acquire and prepare industrial assets ahead of demand, rather than waiting for stabilized properties to emerge. That means looking at where the demand is expected to emerge—likely outside major urban centres and closer to northern markets, port cities, and manufacturing hubs. For example, some brokers are already tracking opportunities to repurpose sites used by the automotive sector for defence-related storage. But positioning ahead of demand requires more than just holding land. It also means bringing investment proposals and development ideas directly to the public sector, helping shape new collaborative relationships.

While defence spending has yet to spark a measurable increase in demand for industrial properties, investments in military housing are already in motion. 

In early 2026, the federal government expanded its military housing construction program to 7,500 units planned across the country and issued an advanced procurement notice for potential projects valued at $3.74 billion. The largest projects are slated for major military bases, including locations in Valcartier, Petawawa, and Edmonton. 

Some developers are responding to this expansion with a strategic pivot. One homebuilder, for example, said they see military housing and institutional partnerships as a way to diversify revenue during a broader residential slowdown. 

For institutional investors, the appeal is structural: one interviewee said base-adjacent rental housing offers predictable, long-duration returns because government-backed leases carry the level of certainty long-term capital desires. Aligning long-term economic interests can help housing built today stay well-maintained for decades.

The federal government has said it wants to use modern methods of construction, as well as low-carbon materials, to deliver this housing. “Military housing may not look like traditional residential development,” one asset manager said. “The opportunity could be in modular solutions.” Another interviewee said this scale of government-backed commitments is what the modular sector needs to justify investing in new manufacturing capacity. Still, procurement timelines, qualification requirements, and underwriting hurdles could slow that progress. 

The military housing pipeline isn’t the only place defence spending could reach the residential real estate market. Interviewees pointed to a second, broader effect: as supply chains, workforces, and communities expand around bases and procurement corridors, demand for residential and purpose-built rental housing could follow. There’s no sign of this yet in the numbers, and it hasn’t shown up in underwriting. It remains a longer-term prospect.

Capturing these defence opportunities requires reinvigorated collaboration between the public and private sectors. Organizations that define their place in defence-related ecosystems—and find ways to advance government priorities—will hold the advantage over their peers as the government rolls out specific requirements.

The first baby boomers turned 80 in 2026—a demographic inflection the senior housing sector has been waiting on for a decade. That shift is driving a level of demand the sector isn’t prepared for: Cushman & Wakefield estimates Canada will need nearly 200,000 additional senior housing rental units over the next decade. The shortfall is coinciding with a health care system pushing care out of hospitals and into communities.

When asked about the best opportunities in Canadian real estate, many of this year’s interviewees highlighted senior housing, a broad category of assets spanning aging-in-place support, retirement residences, independent living, assisted living, and long-term care. One interviewee said the sector “is on a roll,” supported by demographics, improved incentives, and a positive five-year runway. But another cautioned senior housing is “not just a development challenge—it’s an affordability crisis,” pointing to a long period of underdevelopment. The opportunity is there, but it demands operating discipline, not just capital.

This demand, combined with cooling condo presales, is prompting some Toronto developers to turn paused projects into senior housing. One interviewee, for example, is redesigning suites and amenities with accessibility in mind. But others cautioned that existing condo stock is not well suited for senior housing. Suite sizes can be too small, high-rise buildings may lack adequate elevator capacity, and common areas haven’t always been designed for accessibility.

Other companies are going even further, reimagining how care and real estate intersect more broadly. “The opportunity isn’t just senior housing,” one interviewee noted. Sectors that once operated separately, such as housing, medical offices, labs, primary care, assisted living, and retail pharmacies, are increasingly converging around the needs of individuals rather than institutions. 

For some organizations, this means embedding care directly into everyday environments. One interviewee described “medtail” as a significant emerging trend, with medical and wellness tenants increasingly moving into retail settings. Pharmacists are part of this shift: their role has expanded beyond dispensing, into chronic disease management and primary-care screening. As pharmacies take on more clinical functions, they’re becoming a stronger anchor for necessity-based retail properties. Elsewhere, other interviewees described building ecosystems around senior residences: one operator’s developments connect residents to grocery, pharmacy, and medical clinic space, all accessible without going outdoors. Another integrates medical clinics directly inside their senior residences, subleasing space to physicians so care is delivered on site.

This thinking goes beyond senior housing. One asset manager described master-planned campuses: intergenerational communities anchored not just by residences, but by universities and health care facilities. There’s a significant opportunity that extends beyond dedicated care assets. As more Canadians seek to age in place, conventional apartments, rental communities, and mixed-use neighbourhoods will need to become more care-ready—accessible by design, connected to services, and capable of accommodating home-care workers, mobility devices, and remote monitoring. 

A survey by Strategy& (part of the PwC network) found Canadians spend just 73 minutes a year, on average, with a health care provider. It’s a reminder that most health happens outside the health care system, in the places people live and work. The same survey suggests Canadians are ready to invest in that shift, with meaningful annual spending intent across health-friendly home features, from in-home care services to health-tracking devices.

It’s part of a broader pattern: care is shifting from institution-led and occasional to consumer-led and continuous, woven into daily routines rather than confined to institutional settings.

Some organizations are weaving care into residential amenities in novel ways. For example, one multifamily developer provides residents in its upscale properties with virtual access to private clinics. As care becomes more continuous and consumer-led, buildings are also becoming platforms for digital health delivery—telehealth rooms, reliable in-suite connectivity, remote monitoring, and secure data systems—while preserving the dignity, privacy, and choice residents expect.

Unlike conventional real estate, care assets sit within regulated delivery systems. Location, financing, operations, and value are shaped not only by demand and rent growth, but also by provincial policy, licensing, reimbursements, workforce capacity, and public-system partnerships. Organizations are responding in different ways. Some developers have paired up with specialized operators who bring the expertise in labour management, care delivery, and regulatory compliance the sector demands. Some investors have moved in the opposite direction by building capabilities in-house and shifting away from passive ownership toward operating the business directly. A third approach treats the complexity as temporary: one interviewee said they acquire underperforming senior housing, invest in upgrades and stabilize occupancy, then sell once the asset is repositioned.

Labour shortages and changing immigration policies are binding constraints the sector must confront. Operating costs, accessibility redesign, food and insurance inflation, and specialized service delivery are all connected to a labour market where care operators compete for scarce workers. Immigration policy has become a real estate variable that directly affects the viability of care-sector assets. With federal immigration targets lower than they were a few years ago, the pressure on operators to recruit and retain staff is intensifying. 

Beyond these immediate constraints, real estate organizations are confronting a longer-term risk specific to senior housing. Today’s wave of demand is generational: some fear once the current cohort of seniors moves through the system, smaller subsequent generations could leave the market oversupplied. One way to mitigate this risk is by designing senior housing with future flexibility in mind, so suites, common spaces, and building systems can convert to other uses, such as student housing, once demographic demand shifts.

This convergence of care and real estate is most visible in senior housing today. But the same forces—embedding care into everyday environments, designing for flexibility, choosing an operating model deliberately—apply wherever the two intersect. Capturing this opportunity means designing properties around the person living in the space, rather than solely around the care services being delivered. The assets that create the most enduring value will measure their performance in ways that go beyond occupancy and rental rates. They’ll pursue outcomes such as resident independence, reduced isolation, access to daily needs, and the ability to support people as their needs change.

The next real estate cycle is increasingly being defined by opportunities at the intersection of real estate and infrastructure. Looking past traditional sectoral boundaries will help the real estate industry better meet the expectations of investors looking at other asset classes such as infrastructure.

The organizations positioning themselves for this future are building partnerships that bring together diverse, multidisciplinary expertise. By finding ways around the constraints that hold cross-sector projects back, they can move from reacting to these emerging opportunities to shaping them.