Citi JV buys majority stake in three UK airports

Vancouver Airport Services, a joint venture between Vancouver Airport Authority and Citi Infrastructure Investors, has acquired a 65% interest in Peel Airports, a collection of three English airport assets including Liverpool John Lennon.

Vancouver Airport Services (VAS), a Canadian airport investment, management and development company, has acquired a 65 percent stake in Peel Airports from Peel Group, the UK infrastructure, transport and real estate business.

Peel Airports comprises Liverpool John Lennon Airport, Robin Hood Doncaster Sheffield Airport and a 75 percent stake in Durham Tees Valley Airport (with the remaining 25 percent owned by local borough councils). Peel Group is retaining a 35 percent stake in Peel Airports following the deal.

A spokesman for VAS declined to provide financial details of the transaction, saying it was a matter of commercial confidence.

Liverpool John Lennon, the largest of the airports is expected to handle more than 12 million passengers by 2030 and serves more than 70 European destinations. Robin Hood, which opened in 2005, handles more than one million passengers a year; and Durham Tees Valley, which first opened as a civilian airport in 1966, handles nearly 700,000 passengers a year.

Citi Infrastructure Investors, founded in 2007 as the infrastructure investment arm of Citi Alternative Investments, acquired a 50 percent interest in Vancouver Airport Authority in May 2008. The deal saw VAS become Citi’s exclusive platform for investing in airport assets.

VAS currently operates and/or has investments in a global portfolio of 19 airports. In 2009, its airports reported revenues of more than C$530 million and had combined passenger traffic of more than 28.5 million.

VAS has been looking to gain entry to the UK market. Last year it was part of a consortium which lost out in the bidding for Gatwick Airport. Gatwick was sold in October 2009 to US fund manager Global Infrastructure Partners for just under £1.5 billion.