In Q3 2018, 506 infrastructure transactions were completed for an estimated aggregate value of $239bn – as shown in the chart below. The 24% decrease in the number of deals compared with Q2 2018 reflects the ongoing challenge of sourcing attractive infrastructure assets. By contrast, the slight increase of $1.0bn in estimated deal size and $41mn in average deal size may indicate a more competitive investment environment.
North America and Europe remain the most favourable investment regions: they accounted for 71% of deals completed in Q3 2018, marking a six-percentage-point rise from Q3 2017, and a 15-percentage-point rise from Q2 2018. Australasia accounts for the smallest share (3%) of deals completed, but has the highest average deal size estimated at $1bn. This reflects the developed private infrastructure market in Australia and recent large-scale privatizations of infrastructure assets.
Similar to previous quarters, the majority (60%) of deals were completed in the renewable energy sector, of which 86% were attributed to the wind & solar power industry. One notable deal in Q3 2018 that indicates a more competitive investment environment in Australasia and the overall bidding process is the privatization of the WestConnext Motorway. In August 2018, the Sydney Transport Partners consortium – consisting of Transurban Group, AustralianSuper and Abu Dhabi Investment Authority – was awarded a contract by the Government of New South Wales to acquire a 51% stake in WestConnext for $6.84bn. The remaining 49% will be retained by the government.
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