Investing in infrastructure

Market insights

Tuesday 01 September 2015

Read our regular update below, keeping you informed about the latest infrastructure news, trends and developments.

Transurban details proposed Melbourne Western Distributor

Toll road operator Transurban Group held its annual Investor Day in May with CEO Scott Charlton outlining key attributes of the proposed Western Distributor project in Melbourne, which we believe has the potential to add value if it proceeds.

Charlton also shared his objective to have one active network enhancement project in every market at any one point in time, which supports our long held view that the “option value” inherent in its networks provides Transurban with a number of value enhancing growth opportunities that are not fully appreciated by the market.

We continue to believe that there is a strong alignment of interests between Transurban’s management team and shareholders in terms of seeking long-term dividend growth as a result of harnessing the value of toll road networks in Melbourne, Sydney and Brisbane.

The key drivers of Transurban’s dividend growth will be:

  • Strong underlying network traffic;
  • Embedded price escalation across concessions;
  • Operational efficiencies across technology, operations and maintenance; and
  • Traffic uplift from development projects

Ports and software … creating efficiencies

We recently travelled to both Japan and Hong Kong to meet with eighteen companies.

In Hong Kong, the main highlight was a site visit to the operations of Hutchison Port - one of the most efficient port operations in the world. Located near the Pearl River estuary, just to the west of Tuen Mun, the port is well positioned to handle the growing volume of shipments within the Pearl River Delta (PRD) - one of the main hubs of China's economic growth.

We got to spend some time in the control room at the port and saw the live workings of Hutchison Port’s proprietary software program. The software allows the port operators to track, identify and show where each container is at any point in time. This proprietary software program is used at all of Hutchison’s ports across the globe.

The visit provided us with great insights into how a global leader like Hutchison Ports works to achieve best practice and how proprietary software can provide companies with a real competitive advantage. The visit deepened our understanding of the potential for future efficiency gains not only for Hutchison’s ports, but for other ports across the globe that we may invest in the future.

More Infrastructure required!

This month our New York based analysts attended a conference in New York hosted by the government of Brazil, which was hosted by the President and senior ministers. It highlighted the continuing need for the development of infrastructure assets in Brazil. The message was clear – Brazil needs foreign investment and the government will be increasingly supportive of private investment. This is a continuing trend amongst governments around the world as they seek to provide the infrastructure needed to support their economy and people.

This infrastructure update is from Macquarie Investment Management's Infrastructure Securities Team.


Share this

If you enjoyed reading this article, why not share it?

Simply copy and paste the text and include a link to the article. Please read the Expertise Articles Terms of Use before sharing.

Related articles


Find out how we can help

If you'd like to speak to a specialist about how we can help build your business, get in touch.

This information has been prepared by Macquarie Investment Management Limited ABN 66 002 867 003, AFSL 237492 ("MIML"), the issuer of units in the Funds mentioned above and is current as at August 2015.The information in this email is provided for general information purposes only and does not take into account the investment objectives, financial situation or needs of any person. It should not be relied upon in determining whether to invest in a fund. In deciding whether to acquire or continue to hold an investment in a Fund, investors should consider the product disclosure statement. The product disclosure statement is available from MIML by phoning 1800 814 523.

Future results are impossible to predict. This report includes opinions, estimates and other forward-looking statements, which are, by their very nature, subject to various risks and uncertainties. Actual events or results may differ materially, positively or negatively, from those reflected or contemplated in such forward-looking statements. Forward-looking statements constitute our judgement as at the date of preparation of this report and are subject to change without notice.

Investments in a Fund are not deposits with or other liabilities of Macquarie Bank Limited or of any other Macquarie Group entity and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. None of Macquarie Bank Limited or any other member of the Macquarie Group guarantees any particular rate of return or the performance of a Fund, nor do they guarantee the repayment of capital from a Fund.

Except for Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502 (MBL), any Macquarie entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity's obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.