Australia’s Star Entertainment Group has suffered another setback after revealing that a sale and leaseback transaction with investment and funds management firm Charter Hall for the property related to its Treasury hotel and casino in Brisbane has fallen through.
The initial deal, announced in October 2021, was to see Star sell both the Treasury Casino and Treasury Hotel buildings, as well as the car park, for AU$248 million (US$169 million). It had then planned to lease back the hotel and carpark for an initial term of 30 years with two additional 15-year options, while it was to continue operating Treasury Casino until it settled upon the opening of its AU$3.6 billion Queen’s Wharf Brisbane development, after which time casino operations will move to the new property.
Instead, Star said in a Tuesday filing that Charter Hall no longer intends to proceed with the proposed transaction due to conditions having not been satisfied by the relevant date under the terms of the contracts. Charter Hall also declined to extend the dates for satisfaction of the conditions.
“The Star is considering its options in relation to this matter generally,” it said.
The collapse of Star’s Brisbane asset sale comes with the company already facing falling revenues due to various regulatory impediments imposed in the wake of recent inquiries into its operations in NSW and Queensland. An increase in the tax it pays on EGM revenues at The Star Sydney have been put on hold for now but loom as yet another challenge the company may have to overcome.
Meanwhile, the opening of the Queen’s Wharf Brisbane project was recently postponed by four months from December 2023 until April 2024. When complete, the project – a joint venture between Star and its two Hong Kong-based partners, Chow Tai Fook Enterprises and Far East Consortium – will feature four world-class hotels, 50 restaurants, cafes and bars, 12 football fields of public space, and up to 2,000 residential apartments, plus a substantial casino with 2,500 slot machines and gaming tables numbering in the hundreds.