Heathrow stake sale opens the door for a resurgence in airport deals

In the wake of the COVID-19 pandemic, a rebound in travel and rising interest rates is leading some airport owners and operators to sell up after a dearth of dealmaking in the sector. After Spanish infrastructure giant Ferrovial revealed a near $3b deal to sell its 25% stake in Britain's busiest airport Heathrow on Tuesday, a slew of other airports across Europe could be up for sale in 2024, according to bankers, investors and industry sources. "There are green shoots of airports investments coming back to the market as post-Covid passenger demand recovers and also as a result of a sharp increase in underlying cost of debt", said Andras Kranicz, head of infrastructure finance, EMEA at BNP Paribas. "This has encouraged infrastructure equity investors away from highly regulated asset classes with relatively low achievable equity returns towards those which are more volatile, representing higher demand risk exposure and hence higher achievable returns," he added. Among the largest of the airports that may see a change of ownership as soon as 2024, is Edinburgh whose US-based owner Global Infrastructure Partners (GIP) is working on the sale of its majority stake in a process that may value the airport at over E2.5b, according to sources close to the situation. GIP declined to comment. AGS Airports, which oversees operations at Aberdeen, Glasgow, and Southampton airports and is owned by Australia's Macquarie and Spain's Ferrovial, may also follow, two people with knowledge of the plans said on Friday. Ferrovial and Macquarie declined to comment. Until recently there has been a dearth of deals in the sector which has faced headwinds such as rising interest rates and environmental concerns that have dampened valuations, investors and industry sources said. Even including the sale of Heathrow, this year is the slowest for airport transactions in the past decade, totalling $5.9b globally to date, according to Dealogic data.<br/>