Singapore airport operator expands to Britain
Jake Lloyd-Smith in Singapore
Singapore's airport operator has stepped up a drive to expand overseas, taking a 50 per cent stake in a British airport development company.
Yesterday's move is the latest in a string of international investments by Singaporean groups as they try to diversify their earnings streams by striking out beyond its limiting borders.
Economists said the cash-rich bodies - many of which are linked to the Singapore Government - were prepared to pay hefty premiums to snare their targets. More deals were expected to follow, they said.
The Civil Aviation Authority of Singapore (CAAS), a statutory board, said it had bought the half share of Alterra Partners from Bechtel, the United States engineering and construction company. The transaction was made through Singapore Changi Airport Enterprise (SCAE), a wholly owned subsidiary.
SCAE chief executive Goh Chin Ee said: 'The combined strength of our organisations will ensure that Alterra becomes a leader in the emerging airport development market.'
The CAAS' decision follows on the heels of hotel operator Raffles Holdings' S$439 million (about HK$1.88 billion) purchase of Swissotel Hotels and Resorts which runs 23 hotels around the world, most outside Asia.
Also making headlines in recent weeks were banking giant DBS Group's S$10.5 billion pounce on Dao Heng Bank, Hong Kong's fourth-largest bank, and Singapore Telecommunications' A$17 billion (about HK$66.66 billion) proposed acquisition of Cable & Wireless Optus, Australia's No 2 telecoms firm.
Alterra has stakes in Luton Airport, to the north of London, San Jose International Airport in Costa Rica, and Jorge Chavez International Airport in Lima, Peru. SCAE already controls a 7 per cent stake in Auckland International Airport, which it acquired two years ago for NZ$87 million (about HK$276.49 million).
The Alterra investment has spurred speculation CAAS could soon launch more ambitious foreign forays. It is known to be interested in a stake in the soon-to-be-privatised Sydney Airport, worth up to A$5 billion.
Other potential targets include the Netherlands' Schiphol Airport and facilities in Cyprus and the Middle East.
As a statutory board, CAAS must report on its performance to the Singapore Government.
It has been mentioned as a candidate for corporatisation - a first-step towards privatisation.
Industry estimates suggest airport passenger growth is expected to grow by between 4 per cent and 5 per cent a year through to 2010.
Alterra has forecast that in the next nine years, the cost of airport infrastructure requirements will total US$350 billion.
The overseas push by CAAS and others comes as economic growth in Singapore - just as elsewhere in Asia - is set to slow.