The Australian Infrastructure Investment Report, conducted by Infrastructure Partnerships Australia (IPA) and Perpetual revealed that while 95 per cent of infrastructure investors are likely to invest in Australia in the near future, there are significant barriers to entry.
The report, based on a survey of major global and Australian investors, found that 68 per cent of investors cited political risk as their greatest concern in the Australian market.
Moreover, it was found that 42 per cent of investors surveyed said they believe the Australian market is unlikely to provide sufficient opportunities in the near term.
IPA chief executive Brendan Lyon said: “Our research shows a strong appetite for Australian infrastructure projects – with skilled investors wanting to write big cheques for Australian infrastructure.
“However, the report also shows we need to dial up the number of projects and dial down the political risk.
“Australia is rightly regarded as one of the most stable and secure places for infrastructure investment, but the cancellation of Victoria’s East West Link and Queensland’s asset sales have clearly spooked many investors,” said Mr Lyon.
Perpetual Corporate Trust general manager of corporate client services Andrew Cannane said Australia’s mature market makes it an attractive investment destination.
The report indicated that 50 per cent of investors were ready to invest $1 billion in any one project, with 36 per cent marking a willingness to invest more than $2 billion.
“Many foreign investors have set up local offices to compete for available assets. However, we need to increase the visibility of future projects and the value they can provide, to increase investment in the Australian market,” Mr Cannane said.
“This research confirms finance is not the problem. There is a wall of money wanting to invest in Australia, we just need to get the structures right.”
AMP names incoming chief risk officer
Antares Equities hires new director
Former AFA CEO appointed to boutique board
Warning lights flashing on Aussie equities
What’s in store for the economy in 2018?
Busting common passive investing myths