Dexus and APAC – the Australian real estate group’s infrastructure hopes are falling apart

The privatisation of Australia's airports has taken several twists and turns since it began (and was mainly completed) in the late 1990s. Especially latterly, with some of the original investors concluding that the airport sector is oversubscribed and opting to move to fresher pastures.

But it is a relatively recent investor, Dexus, which acquired AMP Capital's interests in Australian airports in 2023, which is causing a stir now as it has come into dispute with APAC, which manages Melbourne Tullamarine Airport - the country's second busiest - along with Launceston Airport in Tasmania.

As a result of a court ruling that identified a breach of confidentiality agreements, Dexus will be required to hand its shares over to co-investors, which include IFM Investors, the NSW Treasury Corporation (known as TCorp), and Future Fund and Utilities (the Sovereign Wealth Fund [SWF} of Australia).

While this is likely to have little or no impact on government policies on privatisation, it highlights how major infrastructure assets are changing hands, demonstrating that these multi-billion-dollar assets are increasingly dominated by superannuation and sovereign wealth funds, rather than direct government control.