By Kane Wu and Scott Murdoch

HONG KONG (Reuters) – Australia is set for its best year ever in M&A activity despite extended pandemic-induced lockdowns in its most populous states as cash-rich corporates and funds scoop up assets, with bankers seeing no sign of the momentum slowing.

Refinitiv data shows that the number of deals with Australian companies increased by nearly sixfold year-on-year, surpassing the three-year average. In 2007, the previous record for annual deals was $139 billion.

A number of deals that targeted listed infrastructure and resource companies drove the volumes.

BHP Group’s (NYSE:) proposed $86billion unification of dual-listed companies and its $14 billion sale to Woodside Oil & Gas (OTC;) Petroleum were two examples.

Superannuation pension funds and other financial institutions found infrastructure assets in Australia particularly appealing. These investors are looking to make long-term investments with low costs to reap the benefits of stable, long-term returns.

Nick Sims, Australia’s co-head for investment banking at Goldman Sachs (NYSE :), stated that “investors in semi-regulated infrastructure assets have high trust in future cash flows of assets they are purchasing.”

Goldman led the league table for announced M&A deals in Asia Pacific, followed by Morgan Stanley (NYSE:) and UBS.

Sims stated that while rates are expected to remain at their current low levels for the future, any increases will occur slowly and infrastructure investors should be looking into long-term investment options.

These deals were made while several states across the country had been under tight lockdowns ever since COVID-19.

“The lockdowns and the uncertainty around the demand side has really led corporate leaders to take a strategic reset of sorts,” said Alex Cartel, Citigroup ‘s (n:) Australia head of investment banking.

You had many corporations, private equity funds and sovereign wealth fund with capital market access that all had strategic ambitions.

‘PENT-UP DEMAND’

Deals targeting Australian companies, at $200 billion, made up 20% of the region’s overall value, the second highest after China, compared to just 4% in the same period last year, according to Refinitiv data.

Tom Barsha, Bank of America (NYSE:)’s co-head of M&A in Asia Pacific, said Australia represented “a real shift” in the overall relative contribution to Asia Pacific volumes.

There are many factors that all come together including the pent-up demand of last year. Notable is also the high level of inbound cross-border activity. “I don’t see any signs of activity slowing.”

U.S. payments firm Square Inc (NYSE:) made the year’s biggest foray into Australia in August with the $29 billion acquisition of local fintech firm Afterpay.

Refinitiv data shows that Asia Pacific transactions reached an all-time high of $1.25 Trillion between January and September. That’s 46% more than the year before. The record also included deals in Southeast Asia, as well as private equity-backed transactions.

Samson Lo, head of Asia M&A at UBS, said more assets owned by private equity firms were set to be put on sale, while mergers between special-purpose acquisition companies (SPACs) and their targets would likely be another volume driver.

He added that China might return with deals for outbound transactions by state-owned enterprises. “2022 could well be another blowout year for M&A.”