Andrew Cannane, Trust Company - Examining the appetite for public assets from private investors
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Transcript of Andrew Cannane, Trust Company - Examining the appetite for public assets from private investors
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INFORMA:
ASSET PRIVATISATION BRIEFING DAY
The Trust Company
Andrew Cannane
General Manager, Corporate Clients
Thursday, 5 December 2013
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INTRODUCTION
1. Examining the appetite for public assets from private investors
a) Where is the demand coming from?
b) Ensuring asset sales are designed to appeal to the private sector
c) What are investors looking for and what constitutes a compelling
investment opportunity?
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DEMAND FOR PUBLIC ASSET SALES
1. Government office portfolio purchased by Cromwell for A$405M
a) Government Tenant
b) Long WALE
c) Potential for repositioning
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DEMAND FOR PUBLIC ASSET SALES
2. Government sandstone buildings repositioned as hotels
3. Ausgrid building
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WHERE IS THE DEMAND COMING
FROM – OVERSEAS?
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• AUD weakening
• Australia growing
GDP growth,
leases with
indexation
• Political uncertainty
AUSTRALIA – A PRIME INVESTMENT
DESTINATION FOR FOREIGN INVESTORS
• Low availability of well
leased, quality stock
Transparency
Legal certainty
• Selective availability
of debt
• On-market
campaigns proving
challenging
ISSUES LOOMING
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THE TOP 20 PENSION FUND
INFRASTRUCTURE MANAGERS
INCLUDE 8 AUSTRALIAN MANAGERS
Source: Towers Watson
Manager Global rank AUM USD bn
Macquarie 1 63
IFM 2 11
AMP Capital 8 5
Hastings 9 5
RARE 12 4
CFSGAM 13 4
Access 14 3
QIC 15 3
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WHATS NEXT FOR SALE?
NSW State Lotteries business
Sydney Desalination Plant
Sydney Ports Corporation
Port Kembla Ports Corporation
Newcastle Ports
Energy Assets
o Eraring Energy
o Data Electricity
o Macquarie Generation
o Cobbora Coal Mine
• NSW Lottery Royalties
• Land Titles Office
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WHAT ARE INVESTORS LOOKING FOR
AND WHAT CONSTITUTES A COMPELLING
INVESTMENT OPPORTUNITY?
CASE STUDY 1: CANADA
Infrastructure
• 5 Canadian bidders for Port Botany
• OTPP – purchased Sydney Desalination Plant and Leighton Telco assets
• 2 Canadian pension funds setting up in Sydney
• Branching out into mining infrastructure
• View there to be less competition for infrastructure assets than elsewhere
• Will look at Newcastle Port and other brownfield assets for sale
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WHAT ARE INVESTORS LOOKING FOR
AND WHAT CONSTITUTES A COMPELLING
INVESTMENT OPPORTUNITY?
CASE STUDY 1: CANADA
Infrastructure
• Caisse de Depot purchase 26.7% stake in Port of Brisbane
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Investor Transactions
CPPIB Macquarie Communications Infrastructure (Broadcast Australia) ($1.64B),
Intoll - ($3.4B), IIF privatisation – now GTA ($600M), Northland Shopping
Mall ($455M), Barangaroo ($1B), AMP Capital Retail Trust ($436M)
AIMCO Great Southern Plantations ($415M)
OTPP Sydney Desalination Plant ($375M), 70% of Leighton’s phone and internet
assets (Nextgen Networks, Metronode (data centre operator) and Infoplex
(cloud computing provider) ($620M)
Caisse de
Depot
Melbourne Convention Centre (and other Plenary assets) ($139M)
PSP Privatisation of Charter Hall Office REIT with GIC ($1.8B), Bay Village
($164M), Gasometer 2 ($144M), Raine Square ($458M), investment into
GAIF ($200M)
OP Trust Investment in mining infrastructure
SELECTED CANADIAN INVESTMENTS
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WHAT ARE INVESTORS LOOKING FOR
AND WHAT CONSTITUTES A COMPELLING
INVESTMENT OPPORTUNITY?
CASE STUDY 2: SOUTH KOREA
• Small domestic market
• Large pension fund inflows
• Tensions on the Korean peninsula
• Korean National Pension Service - the pioneer
• Korean Investment Corporation following
• Familiar with structuring requirements for Australia
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Investor Transactions
KNPS Aurora Place ($658M)
Pramerica
Heitman
Lend Lease – Erina Fair ($412M)
Korean consortium (Samsung C&T, Korea
Development Bank,
Hanwa, Korean Teachers Credit
Union)
20.6% stake in Victorian Desalination Project –
A$160M
Korean Teachers Credit
Union
Joined international consortium taking 3.2%
(A$70 million) in East Link Infrastructure Project,
Melbourne
SOUTH KOREAN INVESTMENTS