PSA Group readies $1.1 Billion Bid for Poland’s Deep-Water Port Terminal

A Singapore-owned port operator is part of an investor group that is set to acquire Poland’s largest container terminal for more than €1 billion ($1.1 billion), according to a person familiar with the matter, highlighting foreign investors’ continued confidence in the Polish economy.

PSA International Pte., a major operator owned by Singapore state investment firm Temasek Holdings, is joining with Australia’s IFM Investors and the Polish Development Fund in a bid to buy DCT Gdansk from the infrastructure investment arm of Macquarie Group Ltd. , the person said.

The participation of Poland’s own sovereign-wealth fund underscores government efforts to take a “more hands-on role” in fostering national champions in sectors such as shipbuilding and automotive, according to a 2018 report by the U.K.’s Department for International Trade.

Even as Poland in recent years has tried to reduce its reliance on foreign direct investment, international investors seek out its assets against a solid economic backdrop.

Poland’s economy is expected to grow by 3.5% this year, according to the European Commission. That forecast compares with 5.1% growth last year, but despite the slower pace would still put Poland ahead a majority of European Union countries.

DCT Gdansk, which started operations in 2007, can accommodate large cargo vessels from China, Korea and other countries. The terminal has the capacity to handle up to 3 million 20-foot equivalent units, or TEUs, a year. TEU is a commonly used measurement to describe the capacity of container ships and terminals.

For PSA, the investment in DCT Gdansk would expand its presence in Europe, where it already has operations in Belgium, Italy, Portugal and Turkey. The Singaporean port operator, one of the world’s biggest, is also active in the Americas, the Middle East and Asia.

A deal for the terminal would mark a second big sale of European infrastructure assets by Macquarie. Last week, the Australian investment bank agreed to sell its 36% interest in Brussels Airport to a group of investors including Swiss Life Holding AG, Queensland Investment Corp. and APG, a pension fund asset manager.

Fundraising by infrastructure funds tracked by data provider Preqin reached a record high $90 billion last year.

Ports, toll-roads, airports and other infrastructure assets generally don’t generate the outsize returns that are expected from more typical private-equity investments. But they are attractive to pension funds, sovereign wealth and other institutional investors because of their recurring revenue, which tends to rise along with inflation.

IFM Investors is owned by 27 Australian pension funds

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