Morning Briefing: New sale plan for Port of Melbourne

New efforts are being made to auction Australia's busiest container port... Non-bank lenders should expect more interest from Chinese borrowers...

Morning Briefing: New sale plan for Port of Melbourne

New sale plan for Port of Melbourne 
Victoria's Labor government is undertaking new efforts to move the stalled $6 billion Port of Melbourne auction forward, testing buyer appetite for a sale under existing legislation, according to the Australian Financial Review. 

The Port of Melbourne sales team has been gauging the interest of infrastructure funds and global investors for a deal under existing administrative powers allowing the government to sell businesses. 

The AFR reports that it is understood bidders were told such a structure could see the port sold without specific legislation approving the deal - not unlike when  Victorian agricultural lender, Rural Finance Corporation was sold to Bendigo and Adelaide Bank in 2014 for $1.78 billion.

While bidders - and the government for that matter - would likely prefer a deal done under a detailed Port of Melbourne sale bill passed by Parliament, the market soundings show the government's willingness to push ahead with the long-term lease. 

Non-bank lenders should expect more interest from Chinese borrowers
Chinese investors with their sights set on Australian real estate are increasingly turning to non-bank lenders as they look to circumvent restrictions aimed at slowing the flow of capital out of the Chinese mainland.

Non-bank lender Chifley Securities has seen a significant increase in demand for finance from Chinese investors, with 27% of its $500 million dollar loan book now devoted to borrowers from China.

According to Chifley Securities, those loans are being used for financing development for residential and commercial projects, as well as the acquisition of properties for future development or currently under construction.

While more of a quarter of their loan book is directed towards Chinese investors, Chifley Securities’ director Joe Morello is predicting more interest from offshore thanks to the falling Australian dollar as well as the restrictions put in place by the Chinese government that limit the amount of capital it’s citizens can take out of the country.

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