Real estate giant Dexus will be forced to relinquish its lucrative $4.5 billion stake in Melbourne Airport following a decisive Supreme Court ruling.
The Supreme Court of New South Wales dismissed Dexus’ attempt to halt the forced sale of its 27.3 per cent holding in Australia Pacific Airports Corporation (APAC), the owner of Melbourne and Launceston airports, on Friday.
The ruling clears the way for APAC shareholders, led by IFM Investors and backed by major superannuation funds, to proceed with a compulsory acquisition of the stake, in a major blow to Dexus’ ambitions to expand beyond traditional property assets.
Justice David Hammerschlag ruled that Dexus had committed a “material irremediable breach” of the shareholders’ agreement governing APAC, validating a default notice issued by fellow investors.
“Dexus committed a material irremediable breach of the shareholders’ deed, and the default notice is valid and effective,” Hammerschlag wrote in his judgment.
The decision represents a significant victory for APAC’s shareholder group, which includes institutional heavyweights such as the Future Fund and IFM Investors. The consortium had argued that Dexus breached long-standing governance arrangements after attempting to restructure ownership of part of its airport stake.
An APAC spokesperson welcomed the ruling, which removes a key obstacle preventing the transfer of one of Australia’s most valuable infrastructure holdings.
“We welcome the decision of the court and look forward to putting the issue behind us,” an APAC spokesperson said.
For Dexus, however, the judgment strikes at the heart of a strategic shift designed to reduce its reliance on office towers and broaden its exposure to infrastructure and alternative assets.
The Melbourne Airport investment has become a cornerstone of that diversification strategy. According to company disclosures, the APAC holding accounts for around 10 per cent of third-party funds under management and contributes approximately 15 per cent of management fees after tax.
Dexus acquired the stake in 2023 from AMP’s former real estate investment arm, Collimate Capital. The investment was widely viewed as a landmark move into aviation infrastructure, a sector increasingly favoured by institutional investors seeking stable long-term returns.
Melbourne Airport has revealed the details of a planned $4.5 billion expansion of its international terminal, following its busiest summer for international travel on record.
Tensions emerged last year after Dexus explored transferring ownership of a portion of its airport holding to new investors while retaining management control. The proposed transaction was structured as an affiliate transfer, which would have allowed the move without triggering rights for existing shareholders to acquire the shares.
The proposal sparked concern among APAC investors and ultimately led to allegations that Dexus had improperly shared confidential information with prospective buyers.
Court documents cited concerns over discussions involving global sovereign wealth funds, including Singapore’s GIC and Abu Dhabi’s Mubadala, both of which have links to airlines operating in the region.
Justice Hammerschlag found that Dexus had failed to act “honestly and openly” towards APAC and other shareholders.
Dexus said it is reviewing the judgment and considering its legal options, including a possible appeal. The company has indicated it may seek a further injunction should it decide to challenge the ruling.
For Melbourne Airport, Australia’s second-busiest aviation gateway, the decision could usher in a reshaping of its shareholder register, with investors likely to be watching closely to see who ultimately emerges as the new owner of one of the country’s most sought-after infrastructure assets.
