Investors bet $7.3b on No 1 port in Australia

A group of global investors including QIC Ltd agreed to pay A$9.7 billion ($7.3 billion) to run Australia’s busiest maritime hub for 50 years, betting on steady income from the port’s daily stream of containers and newcars.

QIC teamed up with Australia’s sovereign wealth fund the Future Fund, Global Infrastructure Partners and Canadian pension manager Omers to run the Port of Melbourne, the group said in a statement on Monday. The port handles about 2.6 million containers annually and more than 1,000 vehicles a day.

The bid topped the Victoria state government’s estimate of A$7 billion. Across Australia, staterun asset sales are fetching higher-than-expected prices as yield-hungry fund managers search for recurring revenue from infrastructure businesses.

“To say that this is a good day, and that it was a pleasant surprise, I think would be a minor understatement,” state Treasurer Tim Pallas told reporters in Melbourne. “We have maximized the value for the taxpayer.”

The purchase of Port of Melbourne is a bet on maritime trade to and from Australia even after the collapse of Hanjin Shipping Co, the South Korean container line that sought bankruptcy protection last month.

In Australia, regional governments are selling assets to help fund new roads, rail and other projects. Victoria, the nation’s second-largest state economy, will use the funds to build a new underground rail tunnel and remove 50 rail level crossings.