InfraRed, Northleaf snap up Vodafone NZ tower assets for $1bn

InfraRed Capital Partners and Northleaf Capital Partners have purchased Vodafone New Zealand’s passive mobile tower assets for NZ$1.7 billion ($1.06 billion; €1.04 billion).

Each firm will acquire a 40 percent stake, with existing shareholder Infratil reinvesting to hold 20 percent of what will be the country’s largest independent tower company, consisting of 1,484 wholly owned towers. Brookfield Asset Management is set to sell its full stake in the new tower company, which is held in Brookfield Infrastructure Fund IV. Infratil is listed on the New Zealand stock exchange and is managed by Morrison & Co.

Infratil and Brookfield each acquired a 49.5 percent stake in Vodafone NZ in 2019, with both investing NZ$1.029 billion in equity for their respective stakes. As part of the latest deal, the new TowerCo will enter into a 20-year service agreement with Vodafone NZ, providing the latter with access to both existing and new towers. The TowerCo has also committed to building at least 390 new sites over the next decade.

InfraRed’s head of Australia and New Zealand, Sven Stubiçan, told Infrastructure Investor the firm’s investment in the tower assets via its London Stock Exchange-listed fund HICL ties in neatly with the vehicle’s expanded mandate beyond its track record of investing in brownfield PPPs.

“This [deal] is one we’ve been tracking for some time. As the pipeline [of brownfield PPPs] has slowly dried up globally, we’ve expanded the mandate of [HICL] into more regulated assets and, now, into corporate offtake-type opportunities. Tower opportunities are a perfect example of corporate offtake-type opportunities that sit within that core infrastructure definition,” Stubiçan said.

The deal is the latest in a string of tower portfolio deals across Australia and New Zealand, including the recent sale of TPG Telecom’s towers portfolio to OMERS and last year’s sale of Telstra’s mobile tower network to a consortium led by Future Fund. With tower opportunities in the region looking to have reached “the end of [the] road”, Stubiçan said opportunities in the fibre space could be targeted next.

“In terms of outlook, the next logical [step] may be the fibre space. We’re yet to see a volume of fibre transactions come to market [in Australia and New Zealand] and it’s something that’s very much played out overseas,” he explained.

“[We] still have a situation where some of the large corporates [in the region] own the fibre assets, just like they did the towers, and you’d imagine that would be a logical opportunity for a similar type of dynamic to play out [as it did] in the towers space.”

The Vodafone NZ mobile tower assets transaction is expected to complete in the fourth quarter of 2022, subject to New Zealand Overseas Investment Office approval.