- Switzer Report - https://switzersuperreport.com.au -

Infrastructure stocks that offer a good yield

Infrastructure is in the news, with the Commonwealth Government deciding to dust off the plans for a second airport for Sydney, at Badgerys Creek, 56 kilometres west from the central business district, to lessen what is seen as the pressure on Sydney’s Kingsford Smith Airport at Mascot.

The news took 4.4% off the share price of Sydney Airport (SYD), the owner and operator of Kingsford Smith Airport, under lease until 2097. But while a second Sydney airport would theoretically compete with Kingsford Smith, the reality is that major international carriers would still want to fly into Kingsford Smith, which has scale and quick links to the central business district; and SYD has first right of refusal over the second airport.

That means that (a) any second airport would mainly accommodate surplus demand that Sydney Airport was unable to meet, and (b) SYD would be the most likely entity to develop and own a second airport.