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AMP Capital has acquired the Kalgoorlie-based Eastern Goldfields Regional Prison Redevelopment Project from Lend Lease and MLC.
The project, which will sit within AMP Capital’s Community Infrastructure Fund (CommIF), is a public private partnership (PPP) with the state government of Western Australia.
It involves two stages of capital works: the design, construction and commission of a new 350-bed prison and associated infrastructure, which is now commissioned, and then the demolition of the existing 100-bed facility and site remediation, which is underway. The deal also includes the provision of facilities management services.
The concession period is approximately 28 years, which comprises the construction period plus 25 years.
AMP Capital Community Infrastructure Fund Manager Andrea McElhinney said: “This project provides long-term, highly predictable cash flows that are underpinned by the Western Australian government. It has an attractive risk and return profile that fits perfectly with CommIF’s investment mandate.
“The acquisition also allows CommIF to expand its geographic exposure to Western Australia, providing our investors with further diversification benefit.”
CommIF is currently invested in 13 social infrastructure assets in Australia and New Zealand worth approximately $8.2 billion in enterprise value, which incorporates the value of the equity and the debt. These include primary, secondary and tertiary education institutions and other assets in the health, justice, defence, water and community sectors.
Ms McElhinney noted: “Social infrastructure not only provides investors with attractive returns that are characteristic of the broader infrastructure asset class but our investors also like the fact its assets benefit the community. Offshore interest in Australian infrastructure has been a major theme of the local market during the last two years and social infrastructure has not been immune to this, with the first offshore investor coming into CommIF this year.”
Financial close for the deal, which is subject to consent from the state and financiers, was achieved on 5 October 2016.
King & Wood Mallesons acted as AMP Capital’s legal adviser.