The Star sells Treasury Casino, enters partial leaseback deal with Charter Hall
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ustralian casino giant Star Entertainment Group has entered into a sale and partial leaseback agreement with investment and funds management firm Charter Hall in relation to its Treasure Casino and Hotel buildings in Brisbane.
Under the terms of the agreement, Charter Hall will acquire the Treasury Hotel and the Treasury Casino buildings, as well as the Queen’s Gardens Car Park, for a total consideration of $186 million.
The Star will lease back the Car Park and the Treasury Hotel building for an initial term of 30 years, with two 15-year renewal options. The lease terms imply an initial cap rate of 4.7%, and include fixed annual rent increases over the term of the lease.
The company will retain its existing interest in the former State Library building, which is not part of the transaction. However, the gaming operator “will explore future uses and ownership models” for the site, according to a press release. It is the smallest of the four Treasury assets.
The transaction is structured to allow for the early settlement of the Treasury Hotel building and the Car Park, while the Treasury Casino building will settle upon opening of Queen’s Wharf Brisbane, expected for the first half of 2023.
The transaction, which remains subject to State consent, has been described as “consistent with The Star’s strategy of releasing capital from non-core or low-yielding assets.” Under the sale agreement, obligations to the State to deliver the repurposing of these assets as part of the Queen’s Wharf Brisbane precinct remain.
The upcoming Queen's Wharf Brisbane precinct is set to become transformative for Brisbane, converting an “underutilized part of the city into a breathtaking and vibrant oasis for locals and visitors.”
It will feature four world-class hotels, 50 restaurants, cafes and bars, public space equaling 12 football fields, and up to 2,000 residential apartments. Moreover, it will include a substantial casino with 2,500 slot machines, and hundreds of gaming tables.
The news of the sale and partial leaseback agreement comes after a major announcement by the New South Wales Independent Liquor and Gaming Authority earlier this month. The operator is set to face a series of public hearings in relation to its review of Star Casino’s suitability to hold a casino license.
The investigation will determine The Star’s compliance to the Casino Control Act 1992 and the Casino Control Regulation 2019, in addition to compliance regarding licensing and legal agreements.
Earlier this month, it was also announced The Star had initiated a plan to sell and leaseback a 49% stake in its flagship integrated resort The Star Sydney, a strategy similar to the “asset-light” plan of MGM Resorts.
