International PPL buying its first five NZ assets

9th Dec 2022 08:04

(Sharecast News) - International Public Partnerships has agreed binding terms to acquire five infrastructure investments in New Zealand for NZD 200m (£104.25m), it announced on Friday, from the Morrison & Co-managed Public Infrastructure Partners.

The FTSE 250 company said the acquisition was its first investment in New Zealand, and would provide further diversification of its investment portfolio, as well as a platform which should generate further investment opportunities into the country.

It said the portfolio consisted of five projects, where it would have 100% ownership, including three schools projects, representing an investment in 11 schools across the breadth of the country, all of which were procured via public-private-partnership concessions with the Ministry of Education.

The fourth asset is the Auckland Prison, where the project company only has responsibility for the provision and maintenance of physical assets, with the custodial services provided independently by the Department of Corrections.

Finally, a purpose-built student accommodation facility at the Auckland University of Technology was acquired, underpinned by a service agreement with the university, guaranteeing 96% of rental occupancy and benefiting from high historic occupancy levels.

The portfolio acquisition remained subject to regulatory approval, including New Zealand's Overseas Investment Office, financier and counterparty consents, after which financial close was expected to occur in the second quarter of 2023.

As at 8 December, INPP said its £250m revolving credit facility was £29.3m drawn, with around £17m committed via letters of credit for near-term pipeline investments.

"We have entered the New Zealand market with a portfolio of high-quality assets primarily within the education sector," said chair Mike Gerrard.

"This investment builds on our education sector expertise and includes six large secondary schools and five primary schools located across the country.

"We'll also be providing housing for around 200 students at AUT's North Shore Auckland campus."

Gerrard said the five investments would "further enhance" INPP's growing Australasian presence, which would represent about 11% by investment fair value of its international portfolio, and provide a "strong platform" for growth.

"New Zealand is a mature infrastructure market, complementing our proven track record over the past decade in Australia."

At 1037 GMT, shares in International Public Partnerships were up 0.25% at 150.58p.

Reporting by Josh White for Sharecast.com.