AMP Capital’s Community Infrastructure Fund (CommIF) has handed a key social infrastructure project back to the Government of Victoria but despite the milestone, a dearth of future projects could send investors and infrastructure developers offshore, particularly at the top end of the market.
AMP’s CommIF designed, constructed and maintained 228 communication sites and towers, as well as transmission equipment, for Ambulance Victoria, State Emergency Services and the Country Fire Authority. The project was handed back to the government last week after seven years.
While eight public/private partnerships (PPPs) were awarded back in 2005-6, next year only three large projects are expected – Sydney’s $1-billion convention centre, a $700-million social housing project in Sydney’s west and a $1-billion hospital in Victoria.
In the most recent PPP announcement in October, the Government of Western Australia selected Assure Partners as the preferred responder to build the new $232-million Eastern Goldfields Regional Prison. The consortium comprised John Holland, Capella Capital and Honeywell.
Come on Aussie!
Increasingly, infrastructure players are looking offshore, to the Christchurch reconstruction program and to South Africa and Africa. European companies that have expressed interest in Australia are now focusing on Latin America, where there are substantial programs.
“We are waiting for the pipeline but it seems to be moving very slowly,” one Spanish executive told I&T News.
“We came down here for a substantial project and expected more to flow. They haven’t and we are still waiting.”
From Asia, Philippine President Benigno Aquino’s recent visit to Australia saw interest from Australian companies in at least $1.5 billion worth of investments into his country.
Companies mentioned have been Macquarie Infrastructure, Melco Crown, Austral and Telstra.
CommIF still hungry
As for AMP, its $124-million CommIF portfolio is small, but comprises eight social infrastructure assets in Australia and New Zealand including schools, TAFE colleges, hospital car parks and water treatment plants.
As the Victorian PPP was handed back, AMP Capital portfolio manager, Julie-Anne Mizzi, said the fund had an appetite for more.
“AMP Capital will continue to acquire additional social infrastructure assets to further grow and diversify our existing portfolio of PPPs to deliver investors stable returns and high income generation,” she said.
CommIF has delivered a 10.8-per-cent yield per annum after fees since inception in 2006.