Superannuation fund Cbus Super has today announced it has acquired a 33.3 per cent interest in Dexus' (ASX: DXS) $1.3 billion joint venture which owns Jandakot Airport in Perth.
Australia’s largest super fund for the building, construction, and allied industries is partnering with property group Dexus in taking ownership of the 76-year ground lease of the airport together with the surrounding industrial precinct located 20km south of the Perth CBD.
Dexus acquired Jandakot Airport in September 2021, and ownership of the joint venture will now be evenly distributed amongst Dexus, Dexus Industria REIT (ASX: DXI) and Cbus Super.
Cbus' investment is in line with the strategic objective set out in its 2021 annual report to more than double the fund’s size in the next five years by expanding beyond building and construction through mergers.
“Jandakot Airport, with its industrial and logistics development pipeline, is an excellent fit for Cbus’ growing direct property portfolio, and we look forward to seeing this investment deliver for members well into the future,” Cbus Super chief investment officer Kristian Fok said.
“We were attracted to this opportunity as it provides a large-scale investment that on completion of development will comprise an industrial and logistic estate with over 700,000m2 of accommodation.
“The property has the benefit of established infrastructure, including an airport, existing modern leased industrial and logistic assets and significant development potential which is expected to enhance returns in future.”
The joint venture is also part of Dexus’ long-term strategy to generate more sustainable income streams while diversifying its funds management business and establishing itself as the real estate investment partner of choice in Australia.
The Jandakot airport acquisition is Dexus’ first investment in operational infrastructure, and the purchase appears to be part of a growing trend of funds investing in infrastructure projects. Most recently, a consortium of buyers including investment and infrastructure funds affiliated with or managed by IFM Australian Infrastructure Fund, IFM Global Infrastructure Fund, AustralianSuper, QSuper and Global Infrastructure Partners entered into a purchase agreement for Sydney Airport (ASX: SYD) worth $23.6 billion.
“We secured the large-scale, high-quality Jandakot portfolio off-market in a highly competitive environment for industrial assets, demonstrating the benefit that our platform brings to our funds management clients,” Dexus CEO Darren Steinberg confirmed.
“We are pleased to be able to secure additional third-party capital for this opportunity, aligning with our local focus to grow our funds management business.”
The final settlement is expected to occur in March 2022 following receipt of the required regulatory approvals.
Jandakot Airport opened in 1963 and consists of two parallel runways and a cross runway on a site measuring 622 hectares.
While it is not an operational passenger transportation airport, Jandakot's primary function is as an aviation training base with approximately 500 aircraft based at the airport belonging to aviation schools and charter companies.
The airport is also home to essential service organisations such as the Royal Flying Doctor Service, DEC / DFES Bushfire Water Bombers, RAC Rescue Helicopter and the WA Police Air Wing.
Cbus Super has more than 778,000 members, 170,000 registered employers and manages more than $67 billion.
“This investment is in line with our strategy to increase our direct property investments via joint ventures with a select number of partners,” Cbus Super head of private markets and infrastructure Alexandra Campbell said.
“The future development of the Jandakot Airport will unleash opportunities for West Australian industrial and logistics businesses, creating both new construction jobs and ongoing work for the local community.”
Shares in DXS are down 1.22 per cent to $10.12 per share at 12.31pm AEDT.
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