An Australian state has sold one of the nation’s largest pension funds a 40-year concession to oversee land parcels for A$2.86 billion ($2.1 billion). The pension program, First State Super, will collect fees for property ownership registrations during that four-decade span.
Meanwhile, the state of Victoria will put the billions in cash toward infrastructure, building up new schools, hospitals, and transportation projects. Victoria will still control the costs of statutory land registry services. After the 40 years, the state will resume full ownership of the land.
In all, the state is expecting to invest around $7.5 billion each year in infrastructure through 2023.
First State Super, one of Australia’s largest superannuation schemes, invests in the retirements of more than 800,000 members. It was initially only for New South Wales government employees, but is now open to anyone eligible for a superannuation. Superannuation is a massive government-run 401(k) plan where employees and employers must contribute toward retirement savings.
Tim Pallis, Victoria’s treasurer, called the deal “outstanding” and said the move “will deliver a major boost to our already unprecedented investment in schools, hospitals, road, and rail.”
“While others talk, we deliver—with more funding to invest in the infrastructure Victorians need, growing our economy and creating jobs,” Pallis said.
Last year, First State Super was part of a consortium that paid about the same ($1.9 billion) for a similar real estate arrangement in New South Wales.