Western Australia is aiming to call for expressions of interest on the partial privatisation of its Landgate land titles office in early January, but the timing remains uncertain.
Government sources confirmed there would be no EOI call before Christmas, but could not give a definite date in January for launching EOIs.
Sources familiar with the transaction say if an EOI call goes out in early January, interested groups will likely have until early February to lodge an EOI. Information memorandum’s will be released two to three weeks after that with a final bid deadline likely to fall around July 2019.
Investor roadshows wrapped up in early December. They saw investors being presented with a different concession to other state land titles auctions.
With earnings of AUD 50m (USD 35.9m) being touted to potential buyers, the state is hoping the transaction will translate into similar multiples fetched in Victoria, SA and NSW of between 25-38 times EBITDA. On that assumption, Landgate could fetch between AUD 1.25bn to AUD 1.9bn.
Sell-side sources argue the earnings figure is on the conservative side since the WA property market is stabilising on the back of an improved economy, booming population and a jump in gross state product.
However, two buy-side sources argue the figures are unrealistic. One said the limited nature of the privatisation would push it closer to AUD 1bn. But all three previous land titles auctions have seen much higher prices paid than initial estimates.
The privatisation would give up to a 50-year concession, but only involve managing automated land registry services. It would also oversee the provision of commercial products such as property reports and sales reports, maintaining the IT system that contains the register and creating new products based on land data.
The state has said it is likely to retain customer fees but pay a services fee to the private operator, who would take property transaction “volume risk”.
The deal is structured like a “digital toll road”, a sell-side source indicated.
The state land valuer plus advisory functions to the Valuer General and Registrar and Commissioner of Titles, will remain in state hands, as reported.
The state is also selling its 77.78% shareholding in Advara, a subsidiary of Landgate.
It has a licence to commercialise Landgate’s new land registry platform in other Torrens Title jurisdictions and is Landgate’s IT service provider.
It is also a technology adviser to Australian Registry Investments (ARI), the operator of the concession for the NSW land registry. ARI is owned by First State Super, Utilities Trust of Australia, Bank of Scotland Group Pension Fund and The Infrastructure Fund.
Sources familiar said those involved in the recent spate of land registry auctions will be bidding including MIRA, First State Super and AMP Capital.
All companies declined comment when contacted by this news service.