Qantas is looking to offload up to 14 hectares of largely undeveloped land surrounding Sydney Airport in order to free up cash and invest in the purchase of new aircraft.
According to a report by The Australian, the carrier was initially hoping to develop the five separate land parcels near the airport, which it has amassed over time since the 1960s.
About 40 per cent of the land on offer is currently used for staff parking, while other parts house its aircraft parts distribution centre, engine workshop, or other facilities.
The carrier revealed earlier in the year that it no longer had a need to develop the land considering the current state of play, and is now hoping to use proceeds of the sale to pay down part of its net debt of $6 billion, and invest in new aircraft.
Despite this, Qantas appears to be an unmotivated seller, with chief financial officer Vanessa Hudson stating any sale of all or part of the land on offer will be dependent on “strong market response”.
“We’ve owned some of this land for more than 50 years and much of it is currently used for carparking,” she said.
“Given how Mascot has developed over that time, there’s a lot of value we can unlock by selling it.”
The sale could be worth up to $500 million, and any sale, should it occur, is expected to be completed by the end of this year.
The land in question includes roughly 138,000 square metres fronting Coward Street, Kent Road and King Street.
Qantas is also seeking a long-term sale and leaseback of its 21,795-square-metre distribution centre, sat upon a 38,920-square-metre industrial holding, for an initial 10-year term, with two further five-year term options.
The airline said it would also consider a sale-and-leaseback arrangement on some other parcels, or all, of its saleable land, depending on market conditions.
Hudson said the property review revealed the amount of undeveloped and underdeveloped land held around Mascot.
“In the current climate we’re obviously looking more closely at what is core and what is non-core, and the reality is that we don’t need this land for any of our long-term strategic goals,” Hudson said.
“Funds released by the sale will be used to pay down the debt we’ve built up getting through COVID-19, which means we can start reinvesting sooner in things like new aircraft.”
Noting that recent lockdowns across Sydney have been a “significant setback”, Hudson said it had been the airline’s intention to offload this land “for several months”.
She also confirmed via the review that the airline would retain the lease at its current HQ on Bourke Road in Mascot long term, putting to rest earlier speculation that the flag carrier could move its base operations to Brisbane or Melbourne.