Hastings Funds Management and a group of investors will pay AUD 2.6bn (USD 1.95bn) for the Land and Property Information (LPI) service in NSW, despite a fierce community backlash.
First State Super and the Royal Bank of Scotland Group’s pension fund (RBS) joined the winning bid alongside Hastings with the Australian-based investors stumping up 80% of the equity while RBS put in the balance, State Premier Gladys Berejiklian announced on Wednesday (11 April).
The winning Australian Registry Investments (ARI) consortium edged out rival offers from Canadian pension funds PSP Investments and Borealis Infrastructure, working with registry giant Computershare.
Macquarie Infrastructure and Real Assets and Carlyle were also reported as having lodged final bids ahead of the 30 March deadline.
The controversial sell-off will enable NSW to inject AUD 1bn into upgrading Parramatta and ANZ Stadiums and use the other AUD 1.6bn for other infrastructure through the Restart NSW fund.
West Australian state registry outfit Advara advised the Hastings bid group to help LPI transform into a digital service provider, according to the government. The state-owned group is not thought to have contributed equity to the consortium.
“This is an industry on the cusp of huge technological advances, and today we have partnered with some of Australia’s most reputable investors who will make sure the people of NSW get the benefit of those advances,” state Treasurer Dominic Perrottet said in a statement.
The transaction has been cleared by the Foreign Investment Review Board, which scrutinizes any deal where overseas shareholders control more than 15% of the bid. It also has sign-off from the Australian Competition and Consumer Commission and the Australian Tax Office.
The government came under a sustained attack from real estate and media moguls concerned that the cost to access information about property ownership may rise or be restricted if a private operator took over. The groups also feared an increased risk of security breaches.
To assuage fears of a price hike and privacy violations the government has installed the Registrar General to regulate ARI. Price rises will be capped at the consumer price index, a measure of inflation for the full 35 years of the concession.
The regulator will have powers to step in and control the LPI operation if it fears the new owner neglects the security of property rights and data. Security of title will remain unchanged and the LPI will continue to operate the Torrens Assurance Fund, used to compensate landowners if there are frauds or errors on the register.
LPI staff will have their jobs guaranteed under the new owner for four years.
The office processed 1m documents in the past 12 months and had 885 employees as at the end of the 2016 financial year