Australian investment bank Barrenjoey is believed to be poised to sell a $2bn stake in CDC Data Centres on behalf of the Commonwealth Superannuation Corporation.
Sources say that a stake in the business is about to be offered in the market at a time of strong demand for data centres.
The $5bn AirTrunk is for sale by owners PSP, Robin Khuda and Macquarie, with Blackstone battling it out with GIP, Digital Bridge, IFM and the Canada Pension Plan Investment Board in the second round of the contest.
Data storage demand is expected to soar in the future years due to artificial intelligence.
Australian listed infrastructure asset manager Morrison & Co purchased CDC Data Centres in 2016 for about $1.1bn on behalf of Infratil and Commonwealth Super.
Infratil owns 48.2 per cent. In 2020, Commonwealth Super sold half of its 48.2 per cent interest to the Future Fund.
In its last annual report Infratil says the fair value was $NZ4.4bn, but many observers believe that based on strong demand, the entire business is now worth closer to $NZ5bn ($4.5bn) or $NZ6bn, which would make Commonwealth Super’s stake at about $2bn.
Infratil is also selling its RetireAustralia business. Its 50 per cent interest was given a fair value of $NZ464m in its annual report.
The $NZ1.3bn acquisition of New Zealand retirement and aged care provider Arvida by Stonepeak ,announced on Monday, could boost the chances of a sale by demonstrating buyer appetite in the sector.
Perhaps the Goldman Sachs-advised Stonepeak will turn its attention to RetireAustralia or Brookfield’s retirement villages business Aveo, which is for sale. However, the understanding is that Stonepeak, with $US71.2bn of assets under management, is more focused on a major infrastructure and utilities deal in Australia.
One option could be Singapore Power’s stake in Jemena, where Stonepeak is known to be competing with GIP.
Singapore Power has been moving to offload its 40 per cent interest in the Australian energy infrastructure company since the start of the year through Goldman Sachs. The stake is expected to sell for about $2bn, given that it is on Singapore Power’s books at $1.6bn.
Jemena owns Australian energy infrastructure assets, including gas pipelines and gas and electricity networks in Victoria, NSW, Queensland and the Northern Territory.
It is 60 per cent-owned by China’s State Grid and 40 per cent by Singapore Power.
The understanding is that Stonepeak, which counts former Macquarie Capital media and telecommunications banker Darren Keogh as a senior managing director, is keen to invest more in Australia and New Zealand and has aspirations to build a portfolio like Infratil’s.
Infratil also owns OneNZ, formerly Vodafone NZ.
Based on Mr Keogh’s earlier experience, a play for one of the Australian telecommunications businesses such as Optus or TPG Telecom could be on the cards in future.
Infratil also owns Wellington Airport, while Stonepeak is lining up for Gold Coast Airport owner Queensland Airports with Kohlberg Kravis Roberts, and has been looking at the Australian assets of Global Switch for sale.
Bids for the 74 per cent Queensland Airport stake, worth over $1.5bn, were due on Monday.
Meanwhile, Stonepeak’s move on Arvida, New Zealand’s fourth-largest retirement village operator with 35 villages, has come after an initial approach within the past year.
Its share price two years ago was $NZ1.50, but before the approach was known it last traded at NZ90c amid recessionary conditions across the Tasman that hurt the overall economy. The offer is at a 65 per cent premium to its last traded price but below its $NZ2.05 net tangible assets a share.
Experts in the retirement industry say that companies are moving to offload assets in the space, as the Australian housing market continues to gain momentum and the housing shortage is exacerbated by higher immigration levels, creating strong demand for retirement villages.
Its appeal to infrastructure investors and private equity is the ageing population, both here and across the Tasman, with the Arvida play based on a NZ housing market recovery.
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