The 2016 IPA/Perpetual Australian Infrastructure Investment Report shows continuing high levels of global interest in Australian infrastructure, but provides a good reminder that investment can – and does – go elsewhere when there are not enough Australian projects.
The report captures the views of 20 global and domestic investors including sovereign wealth funds, pension funds, fund managers, developers, banks and insurance companies who manage more than $110 billion in infrastructure investments worldwide.
Infrastructure Partnerships Australia CEO Brendan Lyon said: “These figures remind us we’re actually competing against the world for infrastructure investment and it will go elsewhere if we don’t’ harness it.
“Half of respondents report that Australia is unlikely to have sufficient projects to satisfy the high levels of investment, forcing them offshore.
“With record high prices for privatised Australian infrastructure and very competitive pricing on new projects, there’s been no better time for state governments to offer projects to the market, funded through asset recycling.
“Our research shows a very strong preference for NSW and Victorian infrastructure, over the on-and-off-again projects and privatisations offered by the resource states.
“This report shows that Australia’s got the type of problem everyone wants – too many investors wanting to put money into infrastructure, right at the time we need more investment.
“This shows that Australia’s governments could do much more to get infrastructure moving.”
Despite the challenges cited by research participants, Perpetual Corporate Trust General Manager, Andrew Cannane, highlighted the increasing number of investors willing to invest large amounts of money in Australian infrastructure.
“Investors identify Australia’s strong track record in infrastructure and our stable economic, fiscal and regulatory environment as key features driving the attractiveness of the Australian market; with the
depth of market knowledge and ease of doing business adding further appeal.
“While the report does highlight areas where we can improve, we must not forget how we have become such a popular investment destination in the first place,” Mr Cannane said.
Seventy five per cent of investors find Australia an attractive destination because of our economic stability, with strong knowledge of the local market and the ease of doing business being two other points of attraction.
Mr Cannane also stressed the importance of overcoming the challenges faced by the sector.
“Global competition for infrastructure investment continues to intensify. Australia will have to work hard to ensure sufficient opportunities are available to the market in order to continue to attract international capital and skills.”
