Hastings-led team in novel A$2.6bn state land registry lease

Hastings is calling the monopoly business ‘a new asset class’ underpinned by stable cashflows, defensive characteristics and a long-term investment horizon.

A consortium led by Australia’s Hastings Funds Management has been chosen as the preferred bidder to operate the land titling and registry operations of Land and Property Information in New South Wales. 

The A$2.6 billion ($1.97 billion; €1.85 billion) bid will see the consortium, Australian Registry Investments, operate the service and levy fees for property ownership registrations over the next 35 years. 

The ARI is 70 percent owned by investors managed by Hastings, including 20 percent held by the Royal Bank of Scotland Group’s pension fund. The remaining 30 percent is held by First State Super, one of the largest superannuation funds in Australia. The service will be managed by Hastings. 

Andrew Faber, executive director of infrastructure at Hastings, described the investment as “essential service infrastructure”, adding land registries represent a new and emerging infrastructure asset class.

“The business is the exclusive provider of land registry services in the state,” Faber told Infrastructure Investor. “It is the only business that handles all the public land registry transactions in the state. The concession is contracted with CPI-linked prices, similar to a toll road, and the business is expected to grow its revenue as the state’s population grows.

“We see the defensive cashflow of infrastructure in the concession, which [will] provide stable returns over a long-term investment horizon, as well as CPI-linked prices and a high EBITDA margin,” he said, adding that the investment is expected to deliver a strong cash yield. 

The consortium has received approval from regulators including the Australian Taxation Office, the Australian Competition and Consumer Commission and the Foreign Investment Review Board. The business will be regulated by the Registrar General, a new watchdog created by the government to oversee ARI’s performance, with the power to monitor and audit performance and even assume control of the business if required. 

NSW’s Land and Property Information operation – the first of its kind to be privatised – is the largest among all states, as it accounts for about 45 percent of real estate transactions across Australia. Faber said the deal also offers a “first-mover advantage”, helping Hastings position itself for other land titling service privatisations in Australia. At the moment, South Australia is also auctioning its land titling registry, with local reports suggesting a 40-year concession could fetch as much as A$2 billion. 

For its part, the NSW government will invest A$1 billion of the proceeds to update Parramatta and ANZ Stadiums and refurbish Allianz Stadium. The remaining A$1.6 billion will be used to fund other infrastructure projects, including public transport, roads, schools and hospitals, through the Restart NSW fund, according to a government statement.