A consortium including Macquarie Group‘s infrastructure unit and a Canadian pension fund will pay A$1.605 billion (US$1.27 billion) to run the state of South Australia’s land registry and management services, the state government said on Thursday.
Land Services SA, a joint venture between Macquarie Infrastructure & Real Assets (MIRA) and the Public Sector Pension Investment Board (PSP Investments) will manage the service for the next 40 years, the premier’s office said in a statement.
It will take responsibility for land registry and property valuation services in Australia’s fifth-most populous state, and will also have exclusive rights to commercialize related data, subject to government approvals.
“I am very pleased to announce the appointment of Land Services SA to provide the state with a range of land services for a 40-year concession period – these services cover both lands titling and land valuation activities,” State Treasurer Tom Koutsantonis said. “The sale will deliver the state an upfront return of $1.605 billion now plus a considerable ongoing royalties stream over the concession period.”
MIRA is a unit of Macquarie Group’s asset management arm, while PSP Investments is one of Canada’s largest pension fund managers with $135.6 billion of net assets under management, as of the end of March.
As part of the deal, Land Services will establish an innovation hub in Adelaide, invest A$35 million in information technology, communications equipment and software, and work with local digital startups.
The treasurer announced the state’s intention to commercialize a range of transactional land services and functions in the 2016-17 state budget.
The winning bid includes financing from three of the five banks that are set to pay a new South Australian bank levy.
“Clearly, South Australia is a very attractive investment destination for financial institutions with this deal involving three of the five major banks, which are subject to the South Australian major bank levy,” Koutsantonis said.
South Australia said in June it would introduce a new tax on the country’s five biggest banks amounting to US$280 million over four years, a move that comes on the heels of a surprise US$4.6 billion federal levy on the same lenders. The tax was announced to help fund job-creation initiatives.
Commonwealth Bank of Australia, Westpac Banking Corp, Australia and New Zealand Banking Group, National Australia Bank and Macquarie Group are subject to the state levy.
(Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
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