Asian partners can tap high rollers
Two Hong Kong partners of Star Entertainment Group have spent $245 million each to acquire a 4.99 percent stake in Australia-listed Star Entertainment Group.
Added to their prior holdings, Chai Tai Fook Enterprises and Far East Consortium now own combined stakes of almost 10 percent valued at $490 million, reports the Brisbane Times. The companies are seeking regulatory approval to increase those holdings; Star has indicated that if the partners reach a combined ownership of 19.9 per cent, it would consider offering them each a board seat.
The consortium has teamed to develop Star’s $3 billion casino complex at Queen’s Wharf Brisbane. The Queensland government granted a gaming license for the development in October 2016; the 99-year term contains a 25-year exclusivity clause that bans other casinos within 60 kilometers (37.3 miles) of Brisbane’s central business district.
The project will occupy 12 hectares (30 acres) of state-owned land and could eventually add 15.3 hectares along the Brisbane River. In total, the 27.3-hectare (67.4-acre) complex could be the largest private development in Queensland, equivalent to 20 percent of the city center. It will include a casino, five hotels, 50 bars and restaurants, 2,000 apartments and a retail district. The site includes eight heritage-listed buildings which will be adapted for re-use.
Several towers of up to 74 stories and a pedestrian bridge across the Brisbane River are also part of the plan, reported Casino News Daily. Construction is expected to begin this year, with the resort set for completion and launch in 2022.
Star and its Hong Kong partners are also working to add a new hotel to Star’s Sydney casino property in New South Wales.
According to the Times, the partners should present formidable competition to its market vial, Crown Resorts, driving international VIP traffic, bringing in premium mass players, and luring wealthy international tourists to Star’s properties.
Chow Tai Fook is controlled by the Cheng family, which owns the Rosewood Group of about 60 hotels in 20 countries across multiple brands and boasts 6 million loyalty members. Far East Consortium, majority-owned by the Chiu family, is a major conglomerate with property development and hospitality businesses in Mainland China, Hong Kong, Malaysia, Singapore, Australia and New Zealand. The Star said it expects to leverage the “expertise, networks, customer bases, and loyalty programs” of its two partners.
Commenting on the new strategic alliance, Star Chairman John O’Neill said, “The board welcomes CTFE and FEC as shareholders in the Star. Our expanded strategic partnership recognizes the strength of our relationships built over the last four years and the shared vision of investing in properties with valuable long-term licenses in sought after destinations.
“The complementary skills and business possessed by each partner have contributed over the past four years to creating long-term value for all shareholders, commencing with Queen’s Wharf Brisbane. This deal ensures a greater strategic and economic alignment of our collective interests and continues The Star’s commitment to deliver growth investments through a capital efficient structure.”
