Infratil Market Update

Infratil Market Update
5 February 2018
This report outlines recent trading activities at Infratil’s businesses, how their growth
initiatives are tracking, and salient market events.
As noted in November’s Interim Report, over the last decade Infratil has invested $4,230
million. 25% went to buying shares in companies and 75% was spent within Infratil’s
companies building and buying real assets such as power stations, buses, and airport
terminals. This investment is the source of Infratil’s earnings and value growth, and the 17%
per annum compound return delivered to shareholders since 1994.
Given that investment in bricks, mortar and equipment averages about $320 million per year,
2017’s outlay was on the low side, but as explained below, there are reasons to anticipate a
pick up.
Notwithstanding a lower than hoped for level of investment, 2017 was a very good year for
Infratil’s shareholders who received a return of 26.8% (NZX50 22.0% and ASX All Ords
19.1%).

Holiday Reading & The Year Ahead
A benefit of the internet is being able to sit on the beach reading the annual forecasts
contained in the Financial Times, New York Times, Economist, etc.
Given that forecasts for 2017 proved to be largely off the mark, this year’s crop were more
nuanced and hedged. Bitcoin was covered extensively, and while no credible analyst put
forward a price forecast, there was an interesting estimate of the electricity required to
process Bitcoin transactions in 2018, which was 130,000GWh, about the same as
Argentina’s entire electricity consumption. The estimated Bitcoin electricity consumption in
2017 was about the same as New Zealand’s 40,000GWh.
A salutary lesson in forecasting was provided by a Financial Times article from late in 2017.
Before reading further, see if you can guess which sorts of companies have created and
destroyed the largest amount of shareholder wealth this century? If the past is a surprise,
don’t be surprised if the future is too. The following table shows the five US, UK and
Japanese companies which have had the greatest positive and negative impacts in their
respective markets (the top company had the greatest positive impact, the bottom one the
greatest negative impact).
S&P500 FTSE-100 MSCI-Japan
Apple British American Tobacco Japan Tobacco
Exxon Mobil HSBC Toyota Motor
Phillip Morris SABMiller Nintendo
Johnson & Johnson Diageo NIDC
Chevron Reckitt Benckiser Shin-Etsu Chemical

Nortel Networks BP NEC
Cisco Systems Cable & Wireless Rohm
Lucent Technologies Marconi Sony
Time Warner Vodafone Fujitsu
General Electric BT Nippon T&T

2

13 of the 15 biggest losers were telecom or equipment companies, with one each from oil
and media. Four winners provide alcoholic drinks or domestic products, three are oil
companies, three tobacco companies, with the rest producing smart phones, cars, computer
games, specialist chemicals, and trading commodities.

Investment Themes
Infratil seeks to invest capital in sectors driven by predictable long-term demand growth. Our
current businesses are well positioned to benefit from fairly predictable long-term
developments in population aging, air travel, decarbonisation, and data. Each continues to
perform robustly which is why Infratil’s level of investment is expected to increase in the year
ahead.
Aging: NZ Department of Statistics figures indicate that at the end of 2017, New Zealand’s
population was 4,840,000, up 1.9% or 90,000 people over the year. The population of
people 85 years and older reached 85,070, up just over 2,000 people from a year earlier.
The Australian Bureau of Statistics’ figures show that for Australia, the population was
24,770,000 in December, up 1.6% or 388,000 people in a year. The number of people aged
85 years and over reached 494,300, up 11,600 people.
Air Travel: During the year, Boeing and Airbus released updated long-term demand
projections for global and Asia Pacific air travel.
Global air travel growth has averaged 4.7% per annum which means doubling every 15
years and this is projected to continue. Asia-Pacific growth is projected to do a little better
than this with travel doubling every 12 to 13 years, driven by an expanding Asian middle
class.
• At present, similar numbers of passengers travel China–Australasia and North America–
Australasia. But the former is forecast to grow 5.6% per annum and the latter 3.3% per
annum.
• Australia had 1.2 million Chinese visitors in 2017, which is forecast to rise to 3.3 million
visitors by 2026.
• New Zealand had 414,000 Chinese visitors in 2017, and a forecast of 1 million visitors
by 2023.
Fortunately, figures also indicate that aircraft fuel efficiency is improving 1.5% per annum
which meant that last year’s 5% per annum air traffic growth “only” resulted in 1.8% per
annum CO
2
emission growth.
Decarbonisation: In November, Syria signed the Paris Agreement bringing to 197 the
number of country signatories, albeit, the USA will leave the agreement in November 2020
following President Trump’s decision to withdraw.
Atmospheric carbon is estimated to have risen by 173 billion tonnes (to 0.0405% of the total
atmosphere) over the last decade and 14 billion tonnes in 2017 (by way of comparison, all
NZ’s exports last year weighed about 1/350
th
of this amount). The Paris Agreement requires
that this increase in carbon cease with each signature country required to take appropriate
steps.
France, for instance, has announced that petrol and diesel cars will be banned from 2040
and no electricity will be generated using coal after 2022. China requires car makers sell two
million electric vehicles per year by 2020 (of 28 million cars that are forecast to be sold in
China that year).
The New Zealand Government has announced that the national goal is to have no net
emissions by 2050 and a Climate Commission is to be established to work out how to do
this. The National Party opposition has indicated that it could support the initiative.

3

It will not be easy to achieve the zero emission goal. In 2015 (the most recent year for which
New Zealand statistics are available) New Zealand’s net emissions were 56 million tonnes,
up from 34 million tonnes in 1990. Over the 25 year period New Zealand’s emissions have
risen 900,000 tonnes a year and will now have to fall by 1,600,000 tonnes a year if they are
to get to zero by 2050.
The following graph shows New Zealand’s annual CO
2
emissions from 1990 to 2015
excluding the emissions and sequestrations attributed to agriculture and land use. In 2015
these emissions totalled 41,735 million tonnes and in 1990 31,451 million tonnes. Of the
annual increase, 5,997 million tonnes came from transport and 4,287 million tonnes from
everything else.

Data: The explosion of electronic data has generated new names for numbers and new ways
to express scale. Ironically, an excellent book on the topic is the Oxford University Press 125
page, “Big Data A Very Short Introduction”. It includes this helpful table.

Data Amount Meaning Maths
Bit 1 binary digit. 0 or 1
Byte 8 bits
Kilobyte Kb 1,000 bytes Byte x 10
3

Megabyte Mb 1,000 kilobytes Byte x 10
6

Gigabyte Gb 1,000 megabytes Byte x 10
9

Terabyte Tb 1,000 gigabytes Byte x 10
12

Petabyte Pb 1,000 terabytes Byte x 10
15

Exabyte Eb 1,000 terabytes Byte x 10
18

Zettabyte Zb 1,000 petabytes Byte x 10
21

Yottabyte Yb 1,000 zettabytes Byte x 10
24

Because data has grown colossally, we do need to know that 1 exabyte equals
1,000,000,000,000,000,000 bytes (one billion billion bytes). For instance, the 1969 Apollo 11
moon landing vehicle had computers with 64,000 bytes of memory, while its now estimated
that 2,500,000,000,000,000,000 bytes (2.5 exabytes) are created every day.
This is occurring because, amongst other things, every day Google is searched 2,500 million
times. 500 million tweets go out. Over 1,000 million people check Facebook. And the rate of
data generation is growing, in 2020 ten times more data is expected to be generated than
was produced in 2013.
One autonomous vehicle generates 10 terabytes of data per day, that’s 156 million times as
much data as was required to help Buzz Aldrin pilot Apollo 11.
And all this data has to be accessibly collected, transported, stored, and protected.

0
5
10
15
20
25
30
35
40
45
50
19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015
Mi l l i ons Tonnes of CO
2
Transport
Total Net of Agriculture
NZ Annual CO
2
Emissions Net of Land and Agricultre:1990 to 2015

4

Wellington Airport: 66% Infratil
In the year to the end of December 2017, Wellington had 6,114,666 passenger movements,
an increase of 156,780 over the prior year. October and November were the two busiest
months ever experienced by the airport.


However, as the graphs show, it has been a story of two markets; a lengthy period of strong
domestic growth, but two years of flat international traffic. Domestic traffic has benefitted
from Air NZ up-gauging its domestic fleet, airline competition, and Jetstar adding services to
Dunedin and Nelson. Wellington’s next addition commences on 27

March when Jetstar
reintroduces flights to Queenstown; Air NZ has already responded positively to this by
increasing jet capacity on the route.
International traffic grew 14% in 2015, but since then has been flat. Wellington had only
5,775 more international passengers in 2017 than in 2016 as Singapore Airlines provided
growth, but it was offset by the withdrawal of Jetstar on the Melbourne route.
The Wellington-Canberra-Singapore service is significantly stimulating travel between the
capitals and, through Singapore, with the rest of the world. International visitor spending
figures show that in 2017 people from Asia spent 15% more in Wellington than they did in
2016. The growth, and the potential for more growth, was behind Singapore Airlines recent
decision to change the route by replacing Canberra with Melbourne.
However, while the Singapore service is a positive, overall flat international traffic reflects
Wellington Airport’s reliance on the Tasman. Australian Bureau of Transport figures indicate
that about 85% of Wellington’s international passengers flew to/from Australia, as against
about 44% of Auckland’s. Both Auckland and Wellington have recently experienced lower
Australian traffic, but Auckland Airport still has robust overall growth because of North
American and Asian traffic, which is not available to Wellington. It’s the key reason
Wellington is seeking to lengthen its runway to allow long-haul services.
The runway extension project formally started in September 2013 with the establishment of a
joint venture between the City Council and the Airport. Now in its fifth year, the next step is to
again seek Civil Aviation Authority approval for the configuration of the runway after its
extension. This exercise is having to be repeated because just before Christmas the
Supreme Court released its judgement about the previous CAA decision. The Court requires
that CAA reassess Wellington’s runway extension application, taking into account additional
financial information and further analysis of alternative engineering solutions. Wellington
Airport is now preparing this additional information for a new application.
In the meantime, the Airport has three major capital works programmes underway. The $72
million parking and transport centre (completion anticipated mid 2018), the $35 million 134
room hotel (completion late 2018) and the $25 million renewal of the airfield taxiway.
On a very different front, Wellington Airport’s energy use in 2017 was 2,500MW/h less than
the prior year, a 19.8% reduction. This was achieved with the help of the Energy Efficiency &
Conservation Authority and energy consultancy Enercon.
In another conservation initiative, the Airport’s food and beverage outlets are taking steps
which are expected to result in 750,000 fewer plastic cups and utensils being used and
thrown away each year.
75%
76%
77%
78%
79%
80%
81%
82%
83%
84%
85%
750,000
770,000
790,000
810,000
830,000
850,000
870,000
890,000
910,000
930,000
Dec-14Dec-15Dec-16Dec-17
Wellington International Passengers& Airline
Capacity Utilisation
75%
76%
77%
78%
79%
80%
81%
82%
83%
84%
85%
4,500, 000
4,600, 000
4,700, 000
4,800, 000
4,900, 000
5,000, 000
5,100, 000
5,200, 000
5,300, 000
Dec-14Dec-15Dec-16Dec-17
Wellington Domestic Passengers& Airline
Capacity Utilisation

5


NZ Bus: 100% Infratil
NZ Bus has now concluded the re-contracting of its services in Auckland and Wellington.
Although it will take some time before they are fully implemented, the changes are profound
and cover fleet, routes, back office and management.
Consistent with previous estimations, NZ Bus will now be about two thirds of its former scale
and provide about a third of the bus public transport in Auckland and Wellington. The fleet
will decline to about 650 buses from just over 1,000; employees will fall to about 1,300 from
2,000 people.
From this base, growth is anticipated. Auckland’s population is growing at 2% per annum
and bus use at twice that rate (last year buses provided over 9 million more rides than was
the case in 2012). The Wellington region population and bus use are both rising at about 1%
per annum (about one million more rides last year as against five years ago).
The new contracts mean that NZ Bus will be providing services in accordance with the
specifications of Auckland Transport and Greater Wellington Regional Council, which cover
the vehicles, their livery, routes, timetables and fares. All fare income will go to the councils
and in exchange, the councils will pay NZ Bus contracted sums to cover operating costs and
to provide a return on the cost of the buses. The contracts are very long with an average
term of over a decade and should provide a predictable stream of earnings.
As NZ Bus transitions to the new contracts, it is disposing of buses that don’t suit Council
specifications and purchasing buses that do. The new buses will include the latest single and
double decker diesels. NZ Bus is continuing to develop options for electric buses, in
particular to replace Wellington’s 60 trolley buses.

Trustpower: 51% Infratil
The excellent summer weather continues to cause wholesale electricity prices which are two
to three times the average for the time of year.
A more medium-term perspective of the sector is provided by the recent MBIE electricity
generation figures. They show a total lack of national electricity demand growth, but
substantial growth in the share of renewable generation.
Annual & most recent 2017 2012 Change
Total National generation 42,805GWh 42,804GWh 0.00%
Gas fired generation 6,096GWh 8,677GWh -29.7%
Coal/oil fired generation 947GWh 3,388GWh -72.0%
Renewable generation 35,762GWh 30,739GWh +16.3%
Residential accounts 1,726,539 1,670,504 +3.4%
Residential consumption 12,285GWh 12,351GWh -0.5%
Real GDP $278 billion $239 billion +16.3%
Population 4,840,000 4,426,000 9.4%
Whether measured in absolute terms or per person, per household or per unit of GDP, the
success of conservation measures and the switch away from carbon-based fuels has been
impressive. As an aside, the lack of demand growth hasn’t been due to consumers installing
roof-top solar. Its relatively poor economics in New Zealand has resulted in a modest take up
and generation in 2017 of perhaps 65GWh.
One development not reflected in the above table is the rise in the price of NZ Carbon Units
over the period. In 2012 their price was about $1/tonne, and is now $22/tonne. Although this
will now be an appreciable cost for generators using coal, oil or gas, the shift away from

6

thermal generation over the last five years reflects the overall higher operating costs of such
plant, especially when they become older.
New Zealand Carbon Unit Prices per Tonne: January 2016 to January 2018

The performance of the industry is important in the context of the Government’s intention to
hold an inquiry into the electricity sector, although its focus seems to be mainly on prices:
“The review will examine whether the price paid by end consumers for electricity is fair and
equitable”.
The last Labour-led Government undertook a similar review and in October 2006 the then
Minister of Energy David Parker reported:
• “I have recently undertaken a review of the electricity market prompted by ongoing
concerns about security of supply and price increases”
• “the review concluded that... some improvements are possible; alternative
arrangements do not appear to offer marked improvements overall and involve
transition costs and risks.”
• “regulatory stability and certainty are important for investor confidence”
• “current market arrangements should be retained but improvements, particularly
relating to security of supply, should be pursued;”
Interestingly, while the then greatest concern was about certainty of supply (that
Government provided guarantees to enable the construction of a large gas fired power
station), the paper’s forecast demand growth has proven to be a colossal over-estimate. In
2006 electricity consumption was 39,269GWh and the Ministerial inquiry forecast demand to
approach 50,000GWh by 2012 with no signs of flagging. In fact, electricity consumption
flatlined after 2006 and 2017’s national consumption was less than 2006’s. There is a lesson
about central planners’ ability to beat the market.
Comparing Trustpower’s results for the three months ended 31 December 2017 against the
same period five years ago clearly shows the success of its strategy to sell more than just
electricity. It also shows that even when average per-customer consumption is falling, it’s still
possible to lift total sales.
Trustpower’s power stations are geographically diversified which is a positive when it’s dry in
the key South Island hydro catchments. 91% of Trustpower’s increased generation relative
to five years ago came from its North Island hydro power stations.

December Quarter 2017 2012 Change
Electricity customers 273,000 205,000 33%
Retail sales 392GWh 358GWh 9%
Total utility accounts 395,000 246,000 61%
Multi-utility customers 98,000 40,000 145%
NZ hydro generation 484GWh 404GWh 20%
Av. Spot wholesale price 8.8c/kwh 4.2c/kwh -
Over 2017, Trustpower’s good operating performance was reflected in an excellent share
market return, but its share price fell 40 cents last week ($125 million in market
capitalisation) on the revelation by the trustees of the Tauranga Electricity Consumers Trust
(TECT, which owns 27% of Trustpower) that they are considering winding the Trust up.

7

Trustpower was formed in1993 from the operations of the Tauranga Electric Power Board
with the ownership being vested with TECT. Over the subsequent 25 years Trustpower’s
evolution (and location) has been strongly influenced by the foundation relationship with
TECT. The possibility of this link ceasing has caused uncertainty and Trustpower have noted
that it does not support TECT’s proposal and is taking advice as to whether the trustees'
proposed actions are lawful.
What happens from here will depend on the consultations being undertaken by Trustpower
and the Trust, which is likely to take several months.
Another positive event which has been offset by the Trust announcement was Trustpower’s
sale of its two Australian hydro power stations. They were purchased in 2014 for
approximately A$65 million or A$270,000 per GWh of average annual output. Reflecting the
subsequent increase in Australian market electricity prices, the sale price of A$168 million or
$690,000 per GWh was a very good result.
The buyer, a subsidiary of Meridian Energy, has a substantial Australian business which will
be able to extract synergy benefits from the hydro generation which were not available to
Trustpower which has no other Australian operations.

Tilt Renewables: 51% Infratil
As shown by the following graphs, Tilt’s quarterly generation over this financial year has
been affected by low wind speeds in both Australia and New Zealand. Only the September
quarter in Australia was better than average and as at 31 December 2017 total annual
generation was about 135GWh below long run averages, which would have reduced
revenue by about $12 million.


While generation has been impacted by the weather, Tilt has been progressing its
development initiatives.
Under construction
Victoria Wind 54MW (172GWh)
Near to commencement

Victoria Wind 300MW
Consented

Queensland Solar 350MW
New South Wales Wind 300MW
Western Australia Wind 105MW
Western Australia Solar 40MW
New Zealand North Island Wind 130MW
New Zealand South Island Wind 400MW
Consenting underway

Australia Wind 1,000MW
Australia Solar 250MW
100
150
200
250
300
350
400
450
June Quart erSeptember
Quarter
December QuarterMarch Quarter
GWh
NZ Quarterly Generation
AverageFY2017FY2018
100
150
200
250
300
350
400
450
June Quart erSeptember Quart erDecember QuarterMarch Quarter
GWh
Australian Quarterly Generation
AverageFY2017FY2018

8

• Tilt’s A$105 million Salt Creek wind farm in Victoria’s south west is under construction
with commissioning anticipated in July 2018. This wind farm is forecast to increase Tilt’s
Australia generation by about 14%.
The output of this power station has been sold under a long-term contract to an
Australian subsidiary of Meridian Energy.
• Tilt will bid output from its planned, and fully consented, 300MW Dundonnell wind farm
into the Victorian State government’s renewable energy auction, which closes on
14

February.
The government is offering to hedge the price on up to 650MW of new renewable
generation capacity for 15 years. If Tilt’s bid is successful, it would entail a very
substantial investment and matching funding requirement.
Infratil has indicated a willingness to support Tilt’s need for additional equity.
• Tilt has added to its portfolio of consented sites with 350MW of Queensland solar and
130MW of New Zealand wind.
• Tilt is also investigating ways to add certainty of supply to its renewable generation, for
example with storage and pump-hydro.
In December, Tilt announced the retirement of its establishment CEO Robert Farron and the
appointment of Deion Campbell to the role. Both individuals had previously worked for
Trustpower and on the development of its Australian operations. Deion was previously Tilt’s
generation and trading general manager.
Robert had a fifteen year career with the Infratil group as one of its most respected
executives.

Longroad Energy: 45% Infratil
The US market continues to be the world’s most newsworthy, and dynamic.
• President Trump imposed a 30% tariff on imported solar generation panels. For utility
scale projects this may increase costs by about 10% which will harm their viability
relative to alternative forms of generation. US regulators have however rejected the
President’s plans to subsidise coal and nuclear generation.
• US corporate tax changes have reduced the value that was previously available to some
US tax paying companies from investing in renewable generation projects. This could
cause an increase in the breakeven price required for a project’s output, but the impact
appears to be marginal rather than fatal. In a fascinating public seminar hosted on
11

January by a US law firm, five financiers gave their individual perspectives, all of
which underlined the scale and depth of the US market and the strong appetite of capital
providers.
http://www.webcaster4.com/Player/Index?webcastId=24015&uid=4308591&g=29ad67c
5-83ab-496a-981a-1ee306259e35&sid=
• Meanwhile, developments outside of the US underlined how mainstream renewable
generation development has become, and how it is attracting the interest of traditional
energy companies.
In Europe, offshore wind projects have been announced that will not require renewable
subsidies, indicating the ongoing improvement to the economics of wind generation.
A spate of investments by oil companies signals their thinking. BP invested US$200
million acquiring a shareholding in Lightsource, Europe’s largest solar electricity
developer. Shell contracted to buy all the output of the UK’s largest solar power plant

9

(68MW). Along with Total and Statoil, they have also invested in several other parts of
the renewable energy generation and distribution chain.
A comprehensive description of Shell’s strategy is provided in
http://fortune.com/2018/01/24/royal-dutch-shell-lower-oil-prices/
The key point is that Shell sees the cost of oil rising and the cost of renewables is falling.
They are seeking to shift capital into the lower cost sector and out of higher cost
projects.
• In November, Lazard released its annual Energy Analysis report.
https://www.lazard.com/media/450337/lazard-levelized-cost-of-energy-version-110.pdf
While their estimates for the generation costs of wind and solar plant depends on wind
conditions and sunshine hours, which vary greatly between locations (for instance the
solar generation Lazard assumes for the best US sites is about twice what would be
expected in New Zealand), the following graph of the average break-even electricity
prices required to provide a satisfactory return on new US wind and utility-scale solar
shows why these sources of energy are supplanting thermal and nuclear.

Lazard’s numbers show that the breakeven cost of wind generation has fallen 67%
since 2009 and utility-scale solar by 86%.
By way of comparison, Lazard’s calculate that the required US$ break-even of wind
generation is 30-60 cents/kwh, utility-scale solar is 46 to 53 cents/kwh, gas is 42 to 78
cents/kwh and coal is 60 to 143 cents/kwh.
The Longroad team continue to progress a portfolio of generation projects, with the two most
material and imminent being for 240MW of wind and 250MW of solar generation in Texas.
However, as will be obvious, while projects progress, they only actually happen once all the
ingredients (site, consents, grid access, funding, plant, construction, the sale of output) are
locked in place.
Alongside the greenfield development programme, the Longroad team are building a
significant, and growing, services business which now manages 1,248MW of wind and solar
generation.
Infratil’s initial commitment to Longroad’s development activities was $65 million, and
additional commitment would be required if it was decided to retain and grow the operational
generation portfolio.
As at 31 December 2017 Infratil had provided $56 million to Longroad. The funding covers
acquisition of wind turbines and solar panels, operating costs, working capital, and the
operational investments discussed above.
0
5
10
15
20
25
30
200920102011201220132014201520162017
NZ cents/kWh
Lazard's Estimated Breakeven Cost of New Wind
& Utility-Scale Solar Generation
WindSolar

10


Perth Energy Holdings (PEH): 80% Infratil
PEH’s energy retailing subsidiary, Perth Energy, continues to improve its financial
performance after cost pressures pushed it into losses in recent years. To remedy this,
management are reducing overheads, renegotiating power purchase terms to reflect lower
wholesale energy prices (a different problem to what is happening in Australia’s east), and
focusing on customer segments where Perth Energy has a competitive advantage.
PEH has appointed Giles Redmile as CEO following the departure of Andrew Rowe. Andrew
did an excellent job developing and implementing the plan to return Perth Energy to profits
and Giles is ideally equipped to continue.
PEH’s generation activities continue to perform to budget.
As at 31 December, PEH’s drawing on the bank facilities guaranteed by Infratil were A$40.7
million (A$41.6 million as at 30 September and A$43.6 million on 31 Mach 2017).

Canberra Data Centres (CDC): 48% Infratil
Following September’s announcement that Microsoft subsidiary Azure had contracted to use
CDC’s data centres for its cloud-based Australian services, CDC started construction of a
fifth, A$150 million, Canberra centre. Construction is progressing on budget and the new
centre is expected to be commissioned in late 2018.
Funding for the new centre is coming from CDC’s long-term debt funding facilities, which
have recently been expanded and extended in term to seven years.
Commissioning Fyshwick 2 will give CDC a total of 60MW of capacity at its two Canberra
campuses, sufficient to accommodate two to three years of growth. CDC is the only provider
of data centres which meets all Australian government security criteria, and the new centre
will incorporate additional security and efficiency features.
As CDC CEO Greg Boorer noted in an interview; "We are completely different to commercial
data centre operators ... because the data doesn't have to leave our four secure walls a lot
of the challenges and the hurdles that government has getting in front of technology and
innovation, melt away."

Hume 1 6MW 1,500m
2

Hume 2 6MW 2,000m
2

Hume 3 9MW 3,100m
2

Fyshwick 1 18MW 5,000m
2

Fyshwick 2 21MW 6,200m
2


One recent notable market development was the A$1,035 million purchase in December of
Australian data centre company Metronode by US Nasdaq listed Equinix. The price was in
excess of 20x Metronode’s earnings, and the addition of 10 centres gives Equinix 15 in
Australia and 40 in the Asia Pacific region.
The transaction, and the stream of announcements by other Australian data centre
companies, underlines both the sector’s growth and increasing investor interest.

11


RetireAustralia (RA): 50% Infratil
The Australian residential property market cooled over the latter part of 2017 although all the
states where RA owns villages had full year value gains. After the price surge that occurred
in 2016, the flattening was predictable.
As tends to happen in any weak housing market, the main causality is turn-over. Along with
other village operators, RA is waiting longer to reoccupy units that become available. The
effect is evident in all states and types of villages.
Notwithstanding, RA is progressing its programme to build new villages that combine the
provision of care and accommodation and is continuing to develop the villages it has
planned for Sydney and Brisbane.
Infratil and the NZ Superannuation Fund (each are 50% shareholders) have jointly
committed to provide A$100 million to enable this to occur. While the residential market is
slower now, these villages will only start being available for occupation in two to three years’
time.
In addition to acquiring land for future development, RA has also partnered with Brisbane’s
Ashgrove Golf Club to use land surplus to the needs of the Club. The village residents will
benefit from both the beautiful surroundings and access to Club facilities. The Club gains the
financial support to upgrade its clubrooms. The approximately 150 units to be built on this
site will not be available before 2020.

ANU Student Accommodation (ANU): 50% Infratil
After achieving 99.8% occupancy in 2017, ANU is anticipating similar levels of demand in
2018.
Work is under way with the university to add student facilities and additional accommodation
to the 3,760 apartments currently provided.

Snapper Services: 100% Infratil
The Snapper team’s accomplishments were recognised in January when they were runner
up for the supreme Transport Ticketing Technology Award granted at London’s Transport
Ticketing conference.