Telecom Infrastructure Partners (TIP), a ground lease aggregator, has been seeded with up to $350m in equity by AMP Capital, an Australian infrastructure investment manager, through its Global Infrastructure Fund II (GIF II). Specifically, AMP Capital’s equity funding, along with debt capital, will enable Telecom Infrastructure Partners (TIP) to invest in 10.0k+ wireless site leases. Notably, AMP’s TIP is being led by Eric Overman the previous CEO of ground lease aggregator APWireless, now Radius Global Infrastructure (NASDAQ: RADI).
Telecom Infrastructure Partners (TIP) – AMP Capital
Telecom Infrastructure Partners (TIP) is headquartered in London, UK. The company will acquire ground leases, through up-front cash payouts (i.e., lease premiums), from property owners, independent tower companies, and wireless carriers.
Geography
Telecom Infrastructure Partners (TIP) is initially targeting cell site and digital infrastructure ground lease investments in 10 countries globally. Specifically, these markets are in both Europe and South America, and include:
- Europe: UK, France, Spain, Italy, Denmark, Belgium, Czech Republic
- South America: Chile, Colombia, Peru
Investment Structures
Telecom Infrastructure Partners (TIP) is purchasing the right to receive wireless site rent, over a defined area, for a specific period of time – typically 30+ years. Additionally, the company is able to buy land underlying wireless infrastructure. Overall, Telecom Infrastructure Partners (TIP) is willing to invest in:
- Master lease agreements (MLAs) – long-term arrangement with rate cards
- Tenant-sponsored lease pre-payment (i.e., premium) programs
- Pre-paid cell site lease acquisition arrangements
- Ground and infrastructure sale-and-leasebacks
- Distributed Antenna Systems (DAS) and data center (lease) financing – to data center developers and operators
Capital Requirements
Telecom Infrastructure Partners (TIP) states that the average lease premium globally is €80k ($94k). Therefore, closing the company’s targeted 10.0k+ wireless site lease deals amounts to €800m ($940m) in total capital need (i.e., debt and equity). In turn, AMP Capital’s equity commitment of $350m would fund ~37% of TIP’s total capital need, for its initial business plan. Indeed, this implies that TIP needs to raise $590m of debt, equating to a loan-to-cost ratio of ~63%.
Management
Eric Overman leads AMP Capital’s Telecom Infrastructure Partners (TIP), as its Chief Executive Officer. Previously, Overman established Wireless Infrastructure Partners (WIP), a ground lease aggregator, in 2009, with backing from Associated Partners (Bill Berkman).
Ultimately, this company became AP Wireless Infrastructure Partners (APWireless), where Overman was CEO. Subsequently, the company was acquired, by what is now known as, Radius Global Infrastructure (NASDAQ: RADI) for consideration of $860m, in February 2020.
Throughout his career, Overman has experience acquiring 6.0k leases in 20 international countries, including in Europe, Australia, and Latin America.
Distributed Antenna Systems (DAS) – Telecom Infrastructure Partners (TIP)
Telecom Infrastructure Partners (TIP) also highlights distributed antenna systems (DAS) as a key investment area of interest. Indeed, DAS was also highlighted by Radius Global Infrastructure, in Q2 2021, as part of broadening its acquisition strategy.
DAS networks allow wireless carriers to increase their coverage and capacity inside venues such as stadiums, airports, train stations, shopping centers, campuses, and large buildings.
Telecom Infrastructure Partners (TIP) will pay an up-front lump sum (lease premium) to manage an owner’s DAS lease or license. Additionally, for property owners that do not currently have a private network, TIP will pay all the up-front capital costs for property owners to build a DAS network. In turn, TIP will lease access to the DAS network to wireless carriers.
Competitors – Ground Lease Aggregators
Competition for the acquisition of real property interests underlying digital infrastructure is rapidly increasing. Typically, this competition derives from two types of companies. Telecom Infrastructure Partners (TIP) will compete with both its tenants (i.e., tower companies) and independent ground lease aggregators.
Firstly, tower companies including American Tower, Crown Castle, SBA Communications, and Cellnex often purchase ground leases under their own towers. Secondly, independent ground lease aggregators include Radius Global Infrastructure (NASDAQ: RADI), Landmark Infrastructure (NASDAQ: LMRK), Everest Infrastructure Partners, Melody Wireless Infrastructure (Melody Capital), and Unison Site Management (DigitalBridge).
