Aware Super launches intermodal terminal platform

Aware Super is aiming to invest in an independent network of intermodal terminals that will help unlock the full benefits of Australia’s national rail freight network.

Sydney-based Aware Super is set to invest in a network of intermodal terminals in Australia via its latest asset management platform, with ambitions to scale it into a multi-billion-dollar business.

Known as the Intermodal Terminal Company, the new entity, wholly owned by Aware Super, will acquire, build and operate a network of intermodal terminals, enabling the terminals to be independent from their users while also being privately owned and funded.

Speaking with Infrastructure Investor, Aware Super’s Krish Gandy, associate portfolio manager for infrastructure and real assets, said having independently owned and operated intermodal terminals would help unlock the full benefits of Australia’s national rail freight network. Currently, the roughly 150 terminals along the existing rail freight network are predominantly used exclusively by their owners.

“The concept of independent intermodal terminals was something that we found attractive, given the way they’re currently structured,” Gandy said. “We felt there could be value for all stakeholders by having independent ownership [of intermodal terminals] by a neutral party.”

Terminals likely to benefit the most from Inland Rail – the rail project which is under construction and expected to be completed in 2027, connecting Melbourne and Brisbane via regional Victoria, New South Wales and Queensland – will be a focus for the platform.

“We see Inland Rail as a key value driver for the broader rail freight network,” said Gandy. “Inland Rail will unlock a lot of opportunity in the broader logistics rail freight network and encourage that modal shift from road to rail. We’re looking for terminals that will benefit the most from that modal shift.

“By having a neutral party that owns and operates these terminals – particularly those that are in strong strategic locations that will benefit from Inland Rail once it’s operational – you open up access, you bring in market competition and, ultimately, provide more value to the end customers that want to use rail freight but currently don’t see the economics getting unlocked, given the way the network is currently structured.

“Add in independent, open access of intermodal terminals, Inland Rail and the general tailwinds that we’re seeing behind the broader acknowledgment of ESG matters and that modal shift away from truck to rail, and we think there’s going to be a lot of value that will get unlocked.”

The launch of ITC follows the superfund’s September launch of Aware Real Estate, which aims to build a A$7 billion ($4.65 billion; €4.39 billion) property platform. Similar to its new property platform, Aware Super is “looking to scale ITC up to something that will be in the billions”, Gandy said.

Last year, Aware Super’s senior infrastructure portfolio manager Mark Hector told Infrastructure Investor that the superfund – which was formed from the merger of First State Super, VicSuper and WA Super in 2020 – had, due to the fund’s increased size and pressure to provide more value-for-money for members, begun prioritising pure direct investments and fee-free co-investments over commitments to blind-pooled funds.