The XP Infrastructure Fund won the auction of Campo de Marte Airport and Jacaribagua on Thursday with a paltry 0.1% premium – the lowest in the history of Brazilian airport concessions.
In a sector where auctions are usually very competitive (and end up with big premiums), the two assets haven’t tempted the market much.
XP Infra IV was the only one to bid, paying R$141.4 million, just R$12,000 above the required minimum.
The lack of interest in airports has left many people with a flea behind their ears: What XP saw and no one saw?
Child’s father, Tulio Machado – head Infrastructure in XP – He said the deal was “opportunistic” and that the thesis had a component Importance Real estate Because much of the revenue from the two airports comes from the rental of real estate assets.
“Operators [de aeroportos] He looked at them and saw Business Tulio told the Brazil Journal. “Already players in Real estate They were afraid of having to operate the airport part, which is a different animal and has many organizational components.”
Jacarepaguá generated R$63 million in revenue in 2020 (the latest public figure), of which 70% came from non-tariff revenue – rental properties.
The airport is located near Barra da Tijuca, and has an area right at the entrance, on Avenida Ayrton Senna, with many properties for rent – from Petz’s to a steakhouse, from a university to three gas stations, as well as a tennis school. and Rede D’Or Hospital.
The picture at Campo de Marte is similar. The airport – located in northern São Paulo – generated R$19 million in revenue in 2020, with R$15 million in real estate revenue, primarily from a mall on Avenida Brás Leme.
But in this case, there is still an important option: the frontage of Avenida Olavo Fontura is now occupied by executive flight hangars, which XP intends to remove and place near the airstrip.
Instead of these hangars, XP intends to build logistics warehouses with a focus on last mile. “It is a very large area, over 100,000 square meters and close to the margin, which creates a natural career for this type of asset,” Tulio said.
According to him, the idea is to build barns in contracts ‘Built to fit’ – In a project that takes about three years to develop.
XP also sees the potential to increase airport tariff revenue, which is currently operating at a suboptimal level.
At both airports, part of the increase in revenue has to come from the recovery of the economy itself, as the number of flights has fallen in the past decade.
In 2012, Campo de Marte had 150,000 takeoffs and the one in Jacaribagua, 130 thousand. Eight years later, those numbers had dropped to 79,000 and 84,000, respectively.
There are also issues specific to each of the assets. Campo de Marte must take advantage of business flight immigration from Congonhas Airport. The premise is that the new operator that won the Congonhas concession would want to expand commercial aviation (which is more profitable), and for that would need to remove some of the executive hangars from there.
A portion of this executive flying goes to Guarulhos, Catarina and Jundiaí Airport. But we think some part should also go to Campo de Marte,” said the manager.
According to him, the idea is to improve the airport’s infrastructure to make it safer, and to hire a commercial manager to actively talk with hangar companies and attract new customers.
In Jacarepaguá, the flight activity is closely related to oil drilling, as the airport is used mostly by large helicopters transporting teams to oil rigs. Navy.
XP’s expectation is that the demand for this type of service will also grow as new platforms are launched.
Another central point of the thesis is cost reduction. The airport concession includes a Voluntary Resignation Scheme (PDV) at both airports, which will cost approximately R$120 million in cases of termination.
However, this downsizing of the structure would reduce process costs by about 40%, adding R$20 million to the minimum.
Today, Campo de Marte operates at costs up to R$25 million, while Jacarepaguá costs R$30 million/year. With POS, XP expects the two together to cost R$33 million/year.
Airports are XP Infra IV’s first investment, which has just raised R$305 million to invest in energy, telecommunications, transportation and sanitation assets only.
Unlike most stock-listed FIP-IEs, which have an income profile similar to that of real estate funds, XP Infra IV has a private equity profile, in pursuit of capital gains. The fund has a term of eight years, of which three years for investment and four years for liquidation.
Since the two-origin profile (which confuses airports with real estate income) didn’t attract many people to the auction, the big question is whether XP won’t have the same problem at checkout time.
This is a “point of interest,” Tulio admits.
“But the sale can be done to a consortium, for example, joining an aviation operator with a player in Real estate,” he said. “In addition, with the improvement of the process and the implementation of all our projects, its profitability will be very interesting.”
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