Qantas has officially offloaded all 13.8 hectares of surplus land it had for sale in Mascot, Sydney, for a grand total of $802 million.
In July, the airline confirmed that it was looking to offload its near-14 hectares of largely undeveloped land around Sydney Airport that it has amassed since the 1960s, in order to free up cash and invest in the purchase of new aircraft.
The land has been purchased by a consortium led by LOGOS Property Group, with the deal set to be finalised by early next year.
An additional 3 hectares of land adjacent to some of the lots sold to the consortium could also be sold off, and the value of the deal could exceed $1 billion when evaluations and negotiations are finalised in early 2022.
Early expectations pegged the sale to be worth around $500 million.
Qantas is in discussions with LOGOS over potential development of the sold land, which could include the creation of a “dedicated precinct” for the airline that could house the Qantas headquarters, a relocated training centre and distribution hub.
This would see Qantas’ various leaseholds across Mascot moved to one location, right next to the airport.
The land in question includes roughly 138,000 square metres fronting Coward Street, Kent Road and King Street.
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.
Currently, about 40 per cent of the land up for sale is used for staff parking, while other parts house its aircraft parts distribution centre, engine workshop, or other facilities.
Qantas proposed a long-term leaseback on portions of the land, including 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.
Qantas initially appeared 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”.
The airline said it received 18 bids in total for the purchase of the land, from both local and international syndicates.
“We went into this process open-minded about whether we’d sell some, all, or none of this land depending on the response from the market,” Qantas CEO Alan Joyce said.
That response was extremely strong, and it has resulted in the sale of all the land.
“We’ll use these funds to help pay down debt that we’ve built up during the pandemic. The strength of this sale and its impact on our balance sheet means we can go back to investing in core parts of our business sooner.”