At our February 24th Capitalise 2026 event, I had the opportunity to join our panellists as we explored how volatility is reshaping the investment landscape – and why resilience across the UK economy and real assets is creating a compelling long-term opportunity.

Speaking on the day, it was clear that for UK investors, volatility is no longer a passing phase. Tariff risks, technological advancements and rapidly changing geopolitical climate are shaping a more complex investment landscape. Yet amid the noise, the UK economy and its real estate markets are proving more resilient than sentiment suggests.

Resilience, however, is about more than weathering shocks. It is increasingly becoming a source of opportunity. From digital transformation and investment in infrastructure, to housing and repurposed offices, our Capitalise 2026 panel made it clear that capital is being drawn toward assets that support economic, societal and technological stability. Below are my key takeaways from our discussion, and their implications for investors.

The UK economy is proving more resilient than sentiment suggests

Despite rapidly increasing geopolitical tensions and renewed trade uncertainty, the UK economy has continued to demonstrate underlying resilience. Growth has moderated but the UK is running in the middle of the pack among advanced economies. Not stellar, but better than popular perception perhaps suggests. My observations from the presentation from Paul Hollingsworth, Head of Developed Market Economics at BNP Paribas, is that much of the current volatility is political rather than macroeconomic. 

While uncertainty can weigh on investment in the short term, the global economy has repeatedly absorbed recent shocks with less lasting damage than many had anticipated. The UK continues to attract significant foreign direct investment and was outpaced only by the US and India between 2022 and 2025, according to McKinsey. It also remains closely aligned with Europe’s key growth drivers, particularly as fiscal support for infrastructure and defence gathers momentum.

Sentiment will continue to fluctuate, but the economic base remains comparatively stable. That resilience provides a foundation for long-term capital allocation and reinforces the case for selective deployment into sectors positioned to benefit from structural change rather than cyclical noise.

Underinvestment is creating a structural opportunity for private capital

Among the defining opportunities of this cycle will be “huge underinvestment… across a number of fronts that just has to be corrected, irrespective of how the politics fall," said John O’Driscoll, Global Co Head of Real Estate at BNP Paribas Asset Management Alts. In his view, Europe – including the UK – has deferred investment for too long in areas that are now strategically unavoidable.

The correction spans energy security, defence and digital infrastructure – from renewables and Artificial Intelligence (AI) to quantum and R&D. Governments are setting direction and, in some cases, providing seed capital, but fiscal constraints mean they cannot fund the scale required on their own.

That gap creates a durable role for private real-assets and infrastructure capital. For investors, this is less about cyclical timing and more about participating in the rebuilding of critical economic capacity – a theme likely to outlast any political cycle.

Digital infrastructure and AI are becoming strategic assets

The strategic importance of digital capacity was another dominant theme. AI is developing rapidly, but as several panellists noted, Europe risks falling behind the US and parts of Asia unless it scales infrastructure at pace. That means attracting AI companies while building the data centres, power networks and research ecosystems that support them.

The UK is starting from a position of strength. It remains one of the world’s leading destinations for start-ups and venture capital, and established R&D clusters continue to attract talent and capital. But planning constraints, grid capacity and power costs present challenges. Long-term ownership models for certain digital assets are also still evolving, raising questions about terminal value and obsolescence risk.

Nonetheless, the direction of travel is clear. Compute capacity, energy resilience and access to innovation clusters are becoming as critical to national competitiveness as transport or utilities. For real-asset investors, digital infrastructure is moving from a niche allocation to a core component of economic resilience.

Defence spending is reshaping the investment landscape

The scale of the shift in European defence policy cannot be understated. What would once have been viewed purely through a geopolitical lens is now also an economic one. Rising defence commitments across Europe – most notably Germany’s fiscal pivot – represent a structural change in public spending priorities rather than a temporary response to events.

Increased spending in defence also drives growth in advanced manufacturing, energy security, cyber capability and AI.  However, it will require upgraded infrastructure, secure supply chains and closer collaboration between public institutions and private capital. 

For investors, this matters because budgets are being reallocated with long-term resilience in mind. Capital will follow policy, and sectors linked to security, energy independence and strategic autonomy are likely to see sustained support over the coming decade.

Success will require active value creation

Finally, several speakers noted that this investment cycle will not resemble the last. Higher structural interest rates mean investors can no longer rely on yield compression or broad thematic momentum to drive returns. As John O’Driscoll said, performance dispersion across and also within sectors is likely to widen significantly.

That shifts the emphasis from allocating capital to broad themes, to creating value at asset level. In real estate, this means deeper asset management, repurposing where appropriate, upgrading sustainability credentials and aligning buildings more closely with occupier demand. 

As the event made clear, resilience is now a defining investment theme. Whether through rebuilding critical infrastructure, scaling digital capacity or actively repositioning assets, the opportunities ahead will favour disciplined, long term capital. In a more demanding environment, those prepared to engage actively and allocate selectively will be best placed to Capitalise. 

To find out more about Capitalise 2026: Real Estate. Reimagined. please visit this link.