$4bn VicRoads deadline looms

The consortium led by Macquarie Asset Management is emphasising its experience with binding proposals for the asset due Wednesday.

Victoria’s motor registry will form a joint venture with a private partner under the state government’s plans. Picture: Andrew Henshaw

Binding proposals for VicRoads, the Victorian motor registry, close on Wednesday with three groups still vying for the asset which is set to sell for more than $4bn.

And there’s plenty of jockeying among the heavyweight bidders for the lucrative, but politically-sensitive asset, particularly with the state heading to an election in November.

Sources involved in the process said the groups comprised one led by Macquarie Asset Management and Aware Super, along with the Australian Retirement Trust – previously Sunsuper and QSuper – another which was a partnership between Brookfield and Morrison & Co, and a third: Plenary Group, which is backed by Canadian pension fund CDPQ, and Serco.

The consortium led by Macquarie has privately been pushing its long-established credentials at running similar assets, most notably Land Services WA, Land Services SA, and the NSW Land Registry Services.

The three bidding groups are understood to be making significantly different proposals in respect of the tax treatment of the privatised entity, with some more aggressive in changes they intend to make to the operations of the registry. It is understood the Macquarie consortium is proposing the fewest major changes.

Aware Super also owns Secure Electronic Registries Victoria, formerly the Victorian Land Registry Services, which the industry superannuation fund giant acquired in 2018 for around $2.9bn.

That auction, at a time Aware was known as First State, saw it compete against another consortium led by Macquarie, which was working at the time with PSP Investments and Sunsuper.

Since the acquisition, Aware has considerably modernised the Victorian land register, which it hopes will defray any concerns those in government may have about privatising the asset.

UBS ran that auction, with the assistance of Flagstaff Partners. Aware was advised by RBC Capital Markets and Gresham.

Morgan Stanley has won the role to sell VicRoads on behalf of the Victoria government after embarking on a scoping study of the business, while KPMG and MinterEllison are also involved.

NSW sold its Land and Property Information titling and registry services to Aware, then First State, and investment funds including Hastings Funds Management and the Royal Bank of Scotland’s pension fund in 2017 for more than $2.6bn.

But that process was acrimonious and had little support from the sector. Groups including the Property Owners Association, Real Estate Institute, Property Council and others in the sector largely believed that the privatisation should be stopped. “Not only would the homeowner have to pay extra insurance of $900 or more to compensate for the loss of confidence in the government’s guarantee, but surveyors, lawyers and other professionals would be forced to pass on additional fees as their costs shoot up,” the Institute of Surveyors NSW president Michael Green said at the time.

Under the Victorian proposal, a private group would partner with key parts of VicRoads in a joint venture that will stretch decades, but mean a comprehensive update to the technology.