Why Gen Z is swapping AI hype for hard assets

I walked into a student pitch night expecting to hear about AI. What I got was Bricks.

Last week I sat on a judging panel at Sydney University's Impact Investing Society annual pitch night — a competitive program that draws over 1,000 applicants for a gruelling four-week process culminating in live presentations to industry practitioners.

I was braced for the usual suspects: AI infrastructure plays, climate tech, some moonshot about decarbonising shipping. What I got, from three out of four teams, was Arena REIT.

In the middle of the most AI-saturated investment cycle, Australia's more ambitious young investors converged independently on a childcare-focused REIT. Not a data centre. Not a semiconductor. A childcare centre.

While there is ample evidence that property creates wealth in Australia, it's not truly surprising, the reasons however were interesting and why they preferred it over affordable aged care accommodation and my top pick, Eureka.

Arena REIT (ASX: ARF): Social infrastructure

Arena is an internally managed REIT owning, managing and developing social infrastructure, predominantly early learning centres (ELCs), across Australia.

• 295 properties in portfolio, predominately childcare centres, 100% occupancy
• 18.4 years weighted average lease expiry triple-net structure
• 18.25¢ FY2025 distribution forecast, +4.9% year-on-year

All leases are triple-net, tenants cover all statutory and operating outgoings, with inflation-linked or fixed annual rental escalations. This makes it defensible during inflation cycles.

The real investment thesis: It's about women

Here's what impressed me most: the students didn't pitch this as a childcare story. They pitched it as a female workforce participation story.

Couples with children under five using paid childcare rose from 42% in 2010–12 to 55.2% in 2021–22.[1] The ABS has identified childcare as the single largest structural barrier to female workforce participation.[2]

That's not a cyclical tailwind, it is a structural shift with government policy now firmly in its corner. The federal government's "3 Day Guarantee", which took effect in January 2026, provides a meaningful catalyst but signals a long-term commitment.

The risks

The students earned credibility by identifying the key risks to their investment thesis, fertility was the number one. Australia's total fertility rate fell to 1.481 in 2024[3], well below the 2.1 replacement rate. A structural childcare business that depends on birth rates deserves scrutiny.

The counter-argument is coherent: net immigration, rising female participation, and the government's subsidy expansion collectively offset the fertility headwind, at least over the short-to-medium term.

Why I prefer Eureka Group Holdings

I posed one question at the end of the night: what about affordable aged care accommodation? The students were on the right track, we own Arena and it is a quality business, but Eureka Group Holdings (ASX: EGH) is, I'd argue, the more compelling structural play right now.

Eureka is Australia's largest provider of affordable seniors' rental accommodation. No entry fees, no exit fees, just week-to-week rental for pensioners and disability recipients, underwritten by Commonwealth Rent Assistance. It sits directly at the intersection of two of the most powerful macro themes in Australia today:

• An ageing population
• A housing affordability crisis

Key highlights:

• $454M assets under management, +29% year-on-year
• 97% seniors segment occupancy
• 5,100+ unit growth target within 2–3 years (from ~2,600 today)

The income base is defensively structured. Government-backed rental support means Eureka's revenue is largely recession-resistant. Management is executing an acquisition-led growth strategy anchored in modular construction and capital partnerships that provides defensive income and growth.

The bigger picture

AI, data centre infrastructure, and technology disruption dominate the headlines and most portfolio conversations. That is where the narrative capital is flowing. And yet, in a room full of Australia's sharpest emerging investors, people who have grown up entirely in the digital age, the overwhelming consensus was still: buy Bricks. Own the long leases. Own the inflation-linked income. Own the assets tied to problems that still need solving.

The students who pitched Arena and the one who should have pitched Eureka understood something that is sometimes lost in the noise of market cycles: that real-world problems, solved by real assets, underpinned by genuine social need and supportive policy are the compounders worth owning.

Sources

[1] Unemployment rate falls to 4.2% as female participation hits record high — Australian Bureau of Statistics
[2] Status of Women Report Card 2025 — Working for Women
[3] Childcare still largest barrier to female participation — Australian Bureau of Statistics
[4] Births, Australia, 2024 — Australian Bureau of Statistics
[*] Eureka data: 1H26 Investor Presentation