Published on : Thursday, February 9, 2017
Palisade Investment Partners will be the Sunshine Coast Airport’s commercial operating partner in a deal worth more than half a billion dollars.Under the deal, the airport will continue to be owned by Sunshine Coast Council, with Palisade operating the asset under a 99 year lease.
Palisade will be responsible for operating, investing and developing the airport and will oversee future negotiations with airlines to expand both domestic and international routes available from the Sunshine Coast.
Mayor Mark Jamieson said that under the deal, the council would maintain responsibility for facilitating the proposed airport expansion project, which included construction of a new runway, apron expansion and related infrastructure.
“Our council is delighted to be able to stand here today with our new commercial partner in the Sunshine Coast Airport and present this outstanding outcome for the people of the Sunshine Coast,” Mayor Jamieson said.“The total value to the Sunshine Coast community of the deal we have struck with Palisade is an estimated $605 million.
“This reflects not only the fact that our airport is a high quality asset in one of the fastest growing regions in Australia, but also the enormous growth potential that it will deliver once the proposed airport expansion project is completed in 2020.“It is fair to say that today’s announcement represents the culmination of a journey that we have been on for well over three years.
“It is the product of the extensive work council has undertaken to generate national and global interest in the airport – and indeed the Sunshine Coast itself – through our investment missions and the connections made with institutional and other significant investors in major infrastructure assets.
“This helped to generate 17 expressions of interest from both domestic and international parties and heightened the competitive tension in securing the commercial partner in the Airport – all of which has been to council’s advantage.
“Council has followed an extensive process which included preliminary market testing conducted by Royal Bank of Canada, followed by a call for Expressions of Interest which attracted global interest, an invitation to chosen respondents to submit indicative bids and then an invitation to submit binding bids.”
Mayor Jamieson said Palisade would make lease payments totalling $82 million of which $67 million would be paid when they took control of the airport’s management, staff and non-land assets, expected to be by September 2017.Palisade has agreed to a further amount of $290 million to be paid for the construction of the new runway in 2022.
Council will retain a financial interest in the operation of the Sunshine Coast Airport by way of an annual rental payment of 5% of gross revenue, conservatively equating to about $205 million over the 99 year life of the lease starting in 2017/18.Palisade will also take responsibility for future terminal development, thereby reducing the projected cost to council of the airport expansion project by $28 million.