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AMP Capital and Infrastructure Capital Group (ICG) have secured approval from Town of Port Hedland Council to take over the 50-year lease of its international airport for $205 million.

The consortium of AMP Capital and ICG was awarded the lease of Port Hedland International Airport in Western Australia during a special council meeting in Port Hedland last night.

The consortium will pay the Town of Port Hedland Council $165 million upfront and will invest a further $40 million to redevelop the airport during the next five years.

AMP Capital’s Infrastructure Equity Fund will take a 44 per cent stake in the asset and AMP Capital’s Core Infrastructure Fund will take a 6 per cent stake, with the remaining 50 per cent being held by ICG’s Diversified Infrastructure Fund.

AMP Capital Head of Australia and New Zealand Funds Michael Cummings said: “We’re delighted that Town of Port Hedland Council has approved our bid with ICG for the lease of Port Hedland International Airport. AMP Capital is an experienced long-term investor in airports and we are pleased to include this airport in our global portfolio, which already includes Melbourne and Launceston airports in Australia and Newcastle Airport in the UK.

“We and our investors like the fact Port Hedland International Airport is a strategically-located asset servicing one of the world’s largest commodity export ports, it has stable cash flows from both the airport’s aeronautical and non-aeronautical businesses, and there is significant scope for the consortium to add value through investment in the terminal and improving the airport’s retail offering. We look forward to working with the Town of Port Hedland Council and the local community going forward.”

ICG Managing Director Tom Laidlaw said: “Port Hedland International Airport is a unique asset. It is a critical piece of infrastructure for Port Hedland and the local resources industry and, as such, has characteristics that make it a great fit for our investors such as stable cash flows and the fact the nearest airport is some 250 kilometres away. We are pleased to partner with AMP Capital and the community to deliver the best outcome for the airport’s customers and the Town of Port Hedland. We are also very excited at the prospect of developing and implementing a new master plan for Port Hedland International Airport that, once completed, will enhance the passenger experience at the airport.”

Port Hedland International Airport is the gateway to Western Australia’s North West and the booming Pilbara region. Located approximately 1650 kilometres north of Perth on the Pilbara coast, the airport accommodates an estimated 500,000 passengers every year and has nearly 70 flights a week, with daily flights to Perth and direct weekly flights to Brisbane, Melbourne and Bali.