Covid costly at Canberra airport, but Terry Snow still flying
The billionaire still has more than $3bn of property assets after converting a sheep paddock into a huge office precinct.
Terry Snow’s purchase of Canberra Airport in 1998 will go down as one of the most impressive property deals in recent Australian history, though his investment took a hit this year.
Operating an airport during the COVID-19 pandemic has been costly, with profits for the billionaire’s Canberra Airport Holdings slumping by about two-thirds this year.
According to documents recently lodged with the corporate regulator and obtained by The Australian, revenue and profits for the airport fell for the first time in recent memory.
The value of the building and land surrounding the precinct was also down.
Canberra Airport was forced to temporarily close earlier this year at the height of the coronavirus crisis, which had a detrimental effect on the business’s financial performance.
Profit for the 2020 financial year was about $97m, down from $242m in the previous year. Revenue for operations at the airport fell from $297m in 2019 to $275m, though the company did pay Snow and his family a $60m dividend for the year — up from the $15m received 12 months earlier.
The profit result was hindered by a $62m loss on the revaluation of the investment property held by the airport company, which had risen by $144m in the previous year.
“Current-year results have been impacted by the COVID-19 pandemic,” a note in the financial report says.
“The airport terminal precinct observed a decline in air passenger traffic from March 2020 onwards resulting in a reduction to aeronautical and associated property revenues and a decline in the investment property valuation of the airport terminal.”
Importantly though, the report did say that “lease income relating to office and retail investment property was not materially impacted by the COVID-19 pandemic”.
Despite the tougher than anticipated 2020, and the prospect of trading at the airport taking a hit well into the 2021 financial year, Snow’s balance sheet is still remarkably strong thanks to the investment property holdings.
Canberra Airport has $3.32bn worth of investment property on its books, and even with almost $1.5bn of borrowings it still has net assets of about $2.55bn.
The jewel in Snow’s crown is the Brindabella Business Park adjacent to the airport terminal, where he has built a hi-tech energy-friendly collection of about 20 office blocks, the Vibe Hotel, conference centre, retail outlets, playing and sports facilities for 9000 workers.
All of which makes the deal to acquire the airport a little over two decades ago still one of the canniest done by any of the property magnates found on The List — Australia’s Richest 250.
Snow’s family have been a mainstay of the Canberra business scene for the good part of a century.
He bought the airport from the federal government for $65m in 1998. He had done that deal with proceeds from the $70m sale of his majority stake in Capital Property Trust and its management company to Mirvac two years earlier.
Snow has made it look like a bargain ever since, taking what was once a sheep paddock and turning it into a huge office precinct and the Majura Park shopping precinct that is so large now that Canberra Airport has been given its own postcode.
There’s more to come, too.
The Airport’s 2020 Master Plan, released earlier this year, forecasts the continued growth of the business park and other land, as well as increases in flights post-COVID, will see 20,000 jobs at the airport by 2028 and up to 36,000 by 2040. Otherwise, Snow also owns commercial properties in Canberra and the $100m equestrian park he has built at a 860ha property at Bawley Point on the NSW south coast, where he helped fight off bushfires last summer.
Snow is also one of the biggest philanthropists on The List, shelling out $5.5m via his Snow Medical Research Foundation in May to fund projects to better understand the impact of COVID-19 on the community.
He also donated $20m to his old school, Canberra Grammar, last year, one of the largest endowments to an Australian school.
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