Southern Cross Consortium lands Sydney Airport

Theprofile of infrastructure funds, particularly those involved in the aviation sector, has been assisted of late with the recent purchase, and privatisation, of Sydney’s Kingsford Smith Airport.

Last week, the Southern Cross Consortium, made up of Macquarie Bank, Commonwealth Bank and others, won the bid with an offer of $5.4 billion to the Federal Government. An additional $192 million has also been agreed on for the balance of the purchase price of the Ansett terminal.

The familiarity and affinity the public holds with airports and travel in general, and particularly the scale and hub of Sydney Airport, could result in the continued rallying of infrastructure funds as an alternative investment.

Investors will be able to access the Sydney Airport investment via a number of Macquarie Bank managed funds, which hold 53 per cent of the asset, as well as a range of local and international institutions.

The unlisted Macquarie Airports Group (MAG) has a 12 per cent interest, while the listed Macquarie Airports (MAP) has 40 per cent and the Macquarie Global Infrastructure Fund has a one per cent holding.

Macquarie Bank Investment Banking Group head Nicholas Moore says the quality of the asset will maintain its growth potential.

“Investors participating in this investment through Macquarie’s funds will be able to share in the growth of the aviation industry where long-term traffic growth has been increasing at around twice the rate of gross domestic product.

“This is through exposure to essential airport infrastructure, which does not have the volatility usually associated with the aviation industry,” Moore says.