Charter Hall tilts for infrastructure play

Charter Hall tilts for infrastructure play

28 July 2017

Charter Hall Group has entered into exclusive negotiations with Westpac Bank to purchase global infrastructure real assets business Hastings Management Pty Ltd.

If the transaction goes ahead, Charter Hall will control about $34 billion in assets, making it one of Australia’s major investment platforms.

Since David Harrison took over the role as sole chief executive of Charter Hall in February 2016, the company has been on a growth-inspired spending spree, says the AFR.

Harrison has closed a range of deals from purchasing pubs to industrial sheds, fulfilling the promises made to super funds domestic and overseas to find strong deals for them in a market where yields are tightening and prices are reaching pre-financial crisis territory.

According to brokers at Macquarie Equities, Charter Hall had good reasons to extend its global property investor relationships and retail distribution channels into new infrastructure opportunities, says the Sydney Morning Herald.

“Listed and unlisted investment teams across real estate are increasingly also considering opportunities in infrastructure,” the analysts said. “The rationale for combining two fund managers with specific experience in each sub-sector appears reasonable.”

Hastings Management is headquartered in Australia with offices in Melbourne, Sydney, London, New York and Asia. The company was created by businessman and former Carlton Football Club premiership captain Mike Fitzpatrick over 22 years ago and purchased by Westpac in 2002.

Currently, the company’s 100 staff manage about $14.3 billion on behalf of 70 institutional investors.

Hastings has focussed on infrastructure equity and debt investing across multiple sectors including airports, toll roads, seaports, gas and electricity transmission, and water utilities.

It currently manages Melbourne and Perth airports, the ports of Newcastle and Portland, and toll roads in NSW and Texas, USA. It also manages water and energy facilities in Australia, California, Northern Ireland, and the south of England.

Earlier this year, the company signed a $2 billion-plus deal to operate to operate the titling and registry operations of Land and Property Information (LPI) in New South Wales.

The platform also manages about $2.7 billion in infrastructure debt capital.

Regarding the tilt for Hastings, the Charter Hall press release states: “The proposed sale provides an attractive expansion opportunity for Charter Hall across real assets funds management.”

The proposed sale and purchase remain subject to completion of due diligence, regulatory and board approvals.

Charter Hall chief executive David Harrison declined to comment on the deal, saying he and Westpac would provide an update on the outcome of negotiations.