SYDNEY A consortium comprising Australia's Hastings Funds Management and pension fund First State Super agreed to pay A$2.6 billion ($1.95 billion) to run New South Wales state's land registry, giving the state government much needed cash to bankroll infrastructure projects.
The deal allows the consortium to levy fees for property ownership registrations in Australia's most populous state for 35 years, taking that function private amid a slew of state government asset sales nationwide. States are being encouraged with up to A$5 billion in cash grants from the federal government to sell assets and quickly re-invest proceeds in infrastructure projects.
The state government said in a statement on Wednesday the money raised from the land registry sale would be invested in infrastructure across New South Wales, as population growth and a housing boom, particularly in Sydney, stretches public services such as transport.
The purchasing consortium is made up of 80 percent Australian institutional investors, including First State Super, investment funds from Hastings Funds Management and a 20 percent stake held by the Royal Bank of Scotland Group's pension fund, also managed by Hastings, it added.
It follows Hastings' successful A$10.26 billion bid for state electricity transmitter, TransGrid, as the lead of another consortium in 2015 and its bid in February for a separate power grid, Endeavour Energy.
The land title deal will deliver "long-term value" for investors, Hastings' chief executive, Andrew Day, said in a separate statement released by the consortium.
"We believe this investment will bring enduring economic benefit to the people of New South Wales and at the same time help build the retirement savings of our members," First State Super CEO Michael Dwyer said.
The consortium has received the relevant regulatory approvals, but the privatized registry will be answerable to the state's Registar General, with power to resume control of the business if required, the NSW government said in its statement.
"The transition to the new operator is expected to be finalised over the coming months," it added.
($1 = 1.3356 Australian dollars)
(Reporting by Tom Westbrook; Editing by Shri Navaratnam)