Western Australia’s government has kicked off the country’s first major asset auction of 2019 with the launch of expressions of interest for the partial privatisation of its Landgate land registry business.
The scope of the partial commercialisation includes automated land titling services, automated plan services, and certain searches and associated products and services that facilitate Landgate’s statutory functions. It does not include any manual lodgements made with Landgate via post or over-the-counter services, in contrast to other Australian land registry privatisations.
The WA Government argued this makes the structure “simpler and lower-risk” than other land transactions such as those conducted in New South Wales and Victoria in recent years, as it includes digital or fully automated services only with limited manual processing requirements. It argued, too, that this “simpler state” of operations was something other states’ land registries would transition to over time.
Investors will be able to bid for a minimum term of 40 years and a maximum of 50 years and will receive contracted service fees over the term of the agreement, with capped escalation at CPI or CPI plus 1 percent.
The winning bidder will also be granted a non-exclusive licence to commercialise the data set of land titling information and property transactions, including to develop new products that could be offered to the public or businesses.
In the tender documents, the government touts the scarcity of land registry opportunities going forward as a reason for investors to get involved, with Queensland the only other major state or territory not to commercialise its land registry functions. It is also unlikely to do so in the near future, due to the anti-privatisation stance of Queensland’s incumbent Labor government.
The government also said WA’s forecast population compound annual growth rate of 1.64 percent for 2018 to 2028 was above the national average of approximately 1.37 percent and that forecast gross state product growth was also above the national average.
It added that Landgate has accounted for approximately 9 percent of transaction volumes by transfer in Australia over the past five years.
Landgate processes approximately 270,000 dealings annually, comprising property transfers, registration and discharge of mortgages, and other land dealings.
Previous bidders for Australia’s land registries are likely to be among the contenders for Landgate, including Macquarie Infrastructure and Real Assets, which missed out on Victoria’s land registry last year, and potentially First State Super.
Sunsuper was involved in MIRA’s bid for the Victorian asset last year and could come to the table again as part of a joint bid, while Australian media reports suggest there could be interest from AMP Capital, IFM Investors and Morrison & Co, among others. Those reports suggested a price tag of up to A$2 billion ($1.4 billion; €1.3 billion) for Landgate although the WA government has declined to disclose any expected figures to date.
Investec Australia is leading the process on behalf of the WA government. EOIs are due by 12 February with first-round bids to follow in late April, according to the tender documents.
Victoria was the last state to privatise its land registry business in August 2018, receiving A$2.86 billion from First State Super for a 40-year concession in what was the superannuation fund’s largest ever equity cheque for a single asset.
First State Super also owns 30 percent of New South Wales’s land registry, alongside Utilities Trust of Australia, The Infrastructure Fund and RBS Pension Trustee, which was leased to the consortium in April 2017 for A$2.6 billion.
South Australia secured A$1.6 billion for a 40-year concession for its land registry from a consortium comprising Macquarie Infrastructure and Real Assets and Canada’s Public Sector Pension Investment Board in August 2017.