First State Super’s investment in a training facility for Fire and Rescue NSW at Erskine Park is part of a larger plan the $70 billion super fund has for Western Sydney.
The NSW government is the first organisation to take a prelease on the 40 hectare greenfield site, called First Estate, which First State Super (FSS) has 100 per cent ownership of. The Fire & Rescue NSW Academy will take up six hectares of the plot once construction of has finished in approximately 18 months’ time.
“We are getting a very good return out of this investment for our members. It’s a 15 year lease with the ability to extend. Ultimately in this environment if you can get long-term cash flows that is tremendous,” said Damien Webb, head of income and real assets at First State Super.
“It’s a very high quality tenant; the New South Wales government is currently triple A rated.”
Webb added this investment was part of a larger thematic, with the super fund targeting unique industrial sites where it can benefit from the government support of the Western Sydney employment area, and also where it can benefit from the new infrastructure spends that are going on, such as Badgery’s Creek Airport.
“There’s Badgery’s Creek, there’s road, there is rail, it’s really going to be quite a hub and hive of activity for commercial and industrial use, but also residential as people continue to move out there,” said Webb. “That will really help industrial precincts we are setting up, with our investment out there.”
In addition to the investment returns, Webb saw second and third order benefits from the development of both the Fire & Rescue NSW Academy and First Estate as a whole.
“This is ultimately going to be a state-of-the-art training academy for Fire and Rescue in New South Wales (FRNSW). We all have a vested interest in making sure we have got a well-trained and well-engaged rescue team in New South Wales,” Webb said.
“The other thing we often talk about is this concept of universal ownership. This is the view that essentially as we become a big fund – post-acquisition of StatePlus we are nudging $70 billion – we need the tide to rise to ultimately influence the long-term member outcomes; we need the markets themselves to rise. It’s not a case whether we can be over or underweight a particular stock that’s really going to drive things.
“We have a vested interest in making sure that tide rises, and investing in things like construction, and centres of employment are going to be critical components to us being a productive and competitive nation.
“That is why we target areas where we can build, and employ hundreds of people.”
The 40 hectare site is next to a prime industrial precinct, on a major road that will be widened to four lanes, and is seven kilometres to Badgery’s Creek Airport. It also has a flat topography that is not prone to flooding.
Michael Dwyer, chief executive of First State Super, said that First State Super was proud to be investing in this new facility that will provide firefighters with a cutting edge training environment and deliver benefits to the burgeoning Western Sydney district.
“New South Wales has one of the world’s largest urban fire and rescue services and it is the busiest in Australia. FRNSW has more than 6800 firefighters and many are members of First State Super. Through our investment, firefighters will have access to an extensive range of training equipment and technology that will better equip them to respond to the dangerous challenges they face as they serve regional and metropolitan communities,” Dwyer said.
“This investment is a great example of the way we put our members’ money to work. It will provide tangible benefits to the community now and secure strong investment returns to build retirement savings for the future. The FRNSW Academy forms part of First State Super’s growing real asset portfolio that also includes Bankstown and Camden Airports, the International Convention Centre Sydney, New Bendigo Hospital and Sunshine Coast University Hospital.”