PE-led consortium pays $7.3b for Port of Melbourne lease
A consortium including QIC, Future Fund and Global Infrastructure Partners (GIP) has paid A$9.7 billion ($7.3 billion) for a 50-year lease at the Port of Melbourne, Australia’s largest container and cargo facility.
The consortium known as Lonsdale also includes Ontario Municipal Employees Retirement System. QIC, an investment manager controlled by the Queensland government, will manage the interests of both Future Fund and its participating US partner, Gold Golden Reef Infrastructure Trust.
The deal represents the highest price ever paid for an Australian port and extends a spate of domestic infrastructure privatizations. This activity has included the A$9 billion acquisition of port operator Asciano by Qube Holdings and Brookfield Asset Management.
"The strength of this result underlines the continued high performance of the Victorian economy - the fastest growing in the country," Victoria State Treasurer Tim Pallas said in a statement. "Leasing the port reinforces Victoria's position as the freight and logistics capital of Australia and will make a great port even better."
More than 3,000 ships visit the port's 36 commercial berths annually, driving a total trade value of A$92 billion. This is expected to be expanded by Lonsdale through efficiency and capacity upgrades, including a transformational change in the road-rail mix.
"The Port of Melbourne is core infrastructure - it is a critical and strategic piece of the Victorian and Australian logistics supply chain," Ross Israel, global infrastructure head for QIC, said in a separate disclosure. "Leveraging our global port and regulated asset experience, QIC is focused on delivering long-term stewardship and improvements to the port and for its users."
QIC and GIP are also members of a consortium that acquired a 99-year lease for Queensland's Port of Brisbane for A$2.1 billion in 2010. In addition, Lonsdale participants hold stakes in local infrastructure such as Melbourne Airport, Iona Gas Storage Facility and EastLink toll road.
GIP focuses on energy, transport and water and waste assets, and claims to manage about $35 billion of investments.
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