The Implications of I Squared's Exit from Ströer's Billboard Unit for European Out-of-Home Advertising Assets

The recent decision by I Squared Capital to abandon its pursuit of Ströer SE & Co.'s out-of-home (OOH) advertising unit underscores a broader recalibration of investor priorities in European infrastructure and advertising markets. This move, attributed to challenges in securing investor support amid macroeconomic uncertainty and shifting risk perceptions, highlights the growing valuation risks and evolving sentiment toward non-core infrastructure assets in the OOH sector. As European markets grapple with geopolitical fragmentation, inflationary pressures, and the rise of digital alternatives, the implications for OOH advertising infrastructure are profound.

Valuation Risks in Non-Core OOH Infrastructure

The valuation of non-core OOH assets in Europe has become increasingly complex due to a confluence of macroeconomic and technological factors. Rapid urbanization and smart city initiatives are driving demand for advanced digital OOH (DOOH) infrastructure, such as interactive billboards and augmented reality displays. However, these upgrades require significant capital investment, raising concerns about the return on investment for investors. According to a report by IMARC Group, the integration of programmatic DOOH technology-enabling real-time ad placement and data-driven targeting-has increased the need for advanced analytics systems, further elevating operational costs.

Compounding these challenges are regulatory and supply-chain risks. Tariffs and geopolitical tensions have disrupted the availability of components critical for digital infrastructure, such as LED panels and data processing hardware according to PwC analysis. Additionally, inflation and slower consumer spending have dampened advertising budgets, with 60% of European marketers reducing ad spend in 2025. While OOH remains a resilient channel-51% of marketers still view it as the most effective-its ability to sustain high valuations depends on its capacity to adapt to digital transformation and cost pressures.

Shifting Investor Sentiment Amid Macroeconomic Uncertainty

Investor sentiment toward non-core infrastructure assets, including OOH advertising, has been shaped by a dual focus on risk-adjusted returns and strategic reprioritization. Infrastructure investors are increasingly factoring in geopolitical risks and macroeconomic volatility into their valuation models, with 92% expecting valuations to rise due to deployment pressure rather than fundamental improvements. This shift reflects a broader trend toward digital and energy-transition assets, where demand for AI-driven infrastructure and grid-connected projects is outpacing traditional sectors.

The I Squared-Ströer deal, which could have valued the OOH unit at €3.5 billion or more, exemplifies this recalibration. The withdrawal of I Squared, a firm known for its infrastructure-focused strategy, signals skepticism about the sector's risk-return profile in the current climate. As Bloomberg reports, Ströer's shares fell 2.5% following the news, reflecting market concerns about the asset's viability as an infrastructure play. This aligns with broader investor caution: 72% of European investors expressed worries about market overvaluation in 2025.

Implications for the OOH Sector and Future Outlook

The I Squared exit highlights the fragility of non-core OOH assets in a landscape dominated by macroeconomic headwinds and technological disruption. While the global OOH market grew to $35.79 billion in 2025, driven by urbanization and digital adoption, European markets face unique challenges. The sector's reliance on traditional revenue streams-such as static billboards-contrasts with the growing demand for AI-integrated, data-driven campaigns according to research. This divergence could exacerbate valuation dispersion, particularly for firms unable to pivot to digital-first models.

For Ströer, the decision to potentially relist the billboard unit for sale remains contingent on structural reforms and fiscal stimulus in Germany. However, the complexity of restructuring its remaining business underscores the sector's broader challenges. As the GIIA Infrastructure Pulse survey notes, European investors are cautiously optimistic about long-term growth in the Nordics, Spain, and the Netherlands, but uncertainties around trade policies and inflation persist.

Conclusion

The withdrawal of I Squared from Ströer's OOH unit is a microcosm of the valuation risks and sentiment shifts reshaping European infrastructure and advertising markets. While OOH advertising retains strategic value, its future depends on its ability to navigate macroeconomic volatility, technological upgrades, and investor demands for risk-adjusted returns. For stakeholders, the path forward requires a nuanced balance between capitalizing on digital transformation and mitigating the structural vulnerabilities of non-core infrastructure assets.