The second leg of the first infrastructure mission by Australian
developers and financiers to Canada plays out today in Vancouver and
tomorrow in Whistler, B.C.
The two dozen delegates, who visited Toronto this the week, are
meeting with government and quasi-government officials to assess the
development needs of those two cities, which will be in the world
spotlight, given that they have been selected as hosts of the 2010
Winter Olympics.
"We are trying to encourage Canadian companies to see that there is
genuine expertise in Australia and [realize that] together we can do
some great things," said Peter O'Byrne, the managing director of the
Australian Trade Commission, an entity also known as Austrade. O'Byrne
noted the Australian mission to Canada follows a similar but smaller
Canadian mission to Australia this year.
Added John Jung, a vice-president with the Greater Toronto
Marketing Alliance, a public-private partnership: "We brought some of
the world's largest investment banks and real estate investment
companies to Canada. And the global decision-makers were in the party.
They were quite impressed and we believe that deals will occur over
time," said Jung, adding the companies who attended included ING Real
Estate, ABN AMRO, Babcock & Brown and Macquarie Bank.
Jung said the Australians are interested in many parts of the two
urban redevelopments but especially the financing of key projects, as
well as the design and development of those projects.
"They want to develop partnerships in this region," said Jung, who
visited Australia in late 2004 and last May.
Jung, whose group was one of the three founding sponsors, said the
financing interest of the Australians has arisen because of the
willingness of their pension funds to look outside Australia for
investment opportunities.
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There is no great surprise that Toronto and Vancouver/Whistler have
been selected.
First, there are the opportunities: Toronto is the country's
largest city and, by most measures, in desperate need of an
infrastructure overhaul. Estimates are that the waterfront renewal
project will take 30 years to complete and eat up about $17-billion.
Vancouver and Whistler are in countdown mode to get ready for the
Olympics.
Second, there is the experience that the Aussies have. During the
past 20 years, major Australian east-coast cities, including Hobart,
Melbourne, Sydney and Brisbane, have all undergone major urban
renewal.
The result -- at least from the perspective of this biased
observer, who was born there and now lives in Toronto -- is the
enhancement of what were very livable cities.
One such example is the Melbourne Docklands, a A$9-billion
($8.1-billion), 500-acre, 30-year waterfront renewal project near that
city's downtown.
That project has kept John Tabart, chief executive of VicUrban, the
state government's sustainable urban development arm, busy for the
past decade. Tabart, a delegate in the mission, has estimated that
when the Docklands is completed, it will be financed with A$90 of
private-sector money for each A$1 of government money.
Those numbers stand in contrast to the situation at Darling Harbor
-- a major redevelopment in Sydney -- that saw A$3 of private sector
money for each A$1 of government money.
"Tabart told us how they did it in Melbourne and thought we may be
able to learn some of those lessons," said Jung of the GTMA, who noted
the key elements to the Melbourne program were a focus on getting it
done and a single overseeing authority. "A single body is needed to
bring everybody together and have the authority to get the job done."
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Macquarie Bank is the best-known of the Australian infrastructure
companies that have set set up operations in Canada. (It has invested
more than $1-billion here.)
For instance, it is the major owner in Highway 407, the toll road
that runs across the north of Toronto; the tunnel that runs between
Windsor, Ont., and Detroit, and part of the electricity grid in
Alberta.
It also manages an electricity generating station that is now part
of the Macquarie Power Income Fund.
Recently, it acquired an Ontario-based seniors retirement company.
Earlier this year, it was awarded the management contract for the Sea
to Sky highway project in British Columbia.
"There are some opportunities for us," said Mark Baillie, head of
North America and European real estate for Macquarie Bank.
"In our view what's required is for the various government-related
bodies to break down the project into something that's tangible and
manageable.
When that happens some plans could be made," said Baillie, whose
group manages about US$10-billion of real estate assets -- spread
across 350 projects -- in North America.
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Bob Onyschuk, a partner with Toronto-based law firm Gowling Lafleur
Henderson, also played a key role in getting the Australian mission to
Canada. (Onyschuk's firm, along with the Canadian Consulate in Sydney,
was a founding partner in the mission.)
He visited Australia in May, along with GTMA's Jung and Jeff
Steiner, chief executive of Toronto Economic Development Corp.
Onyschuk visited Australia in May "because he wanted to see the
fantastic waterfront developments in the two Australian cities and to
bring some of that expertise to Canada," he said, noting that the
first requests for proposals for development of the Toronto waterfront
will be issued next Spring.
"And the Aussies sent the global heads for real estate to Canada
this week They are definitely interested."
