Star Entertainment’s $2 Billion Gold Coast Development Approved
The government of Queensland has approved a $2 billion development plan from The Star Entertainment Group. There is a long way to go before construction begins, although this green light will keep the hopes of Stars’ directors high. The Gold Coast is set to benefit massively.
Star was keen for the Queensland government to abandon plans for a second casino in the city. So much so that it unveiled a multibillion-dollar master plan to develop its assets on the Gold Coast. It proposed a 237-meter tower at is casino complex in Sydney’s Pyrmont. New South Wales planning department opposed the tower, although one now looks likely on the back of this news.
Star’s Gold Coast Convention and Exhibition Centre, which is built on state-owned land, is to undergo a $100 million refurbishment. John O’Neill, Star Group’s Chairman, spoke at the company’s annual general meeting last week and highlighted their ambitious plans.
New Towers Coming to the Gold Coast
Among them are five additional towers on top of those existing at The Darling and The Star Grand. A refurbishment of the Sheraton Grand Mirage resort is on the cards. Star bought the Southport Spit on the Gold Coast resort for $140 million in 2017. Renovations will include a new restaurant, beach club, bar, and gym. They will not, however, include a new casino.
“The Star’s position has always been – we support investment in tourism assets on the Gold Coast – but the Gold Coast market is too small for two casinos, Mr O’Neill said. “We are not alone in this assessment of the market. The introduction of another local casino competitor would force us to defend our local market share at the expense of driving incremental growth in interstate and international tourism.”
A master plan of this scale costs more than $2 billion, which is too much for Star to solely front. Star posted on its development website that this project is happening without the need for more pokies. It has partnered with two major investors to get the project moving. Chow Tai Fook and Far East Consortium.
Chow Tai Fook from Hong Kong is one of Asia’s largest diversified conglomerates and could fund the project itself. Far East Consortium has been responsible for $2 billion worth of Australian projects since 1990.
Huge Gold Coast Investment
The figures and numbers involved in the Gold Coast development are mind-boggling. The Queensland government has given the project the green light. Star has promised to generate 1,800 construction roles per tower once building begins. A further 3,000 additional new roles become available once the development is fully operational.
More than $4.35 billion, that’s billion, is being invested in the Star Entertainment Queensland project, a phenomenal figure. $1.5 billion is the replacement value of the original The Star Grand and the Sheraton Mirage. A further $850 million goes towards the transformation of the existing property. Completion of the masterplan weighs in at a cool $2 billion, taking the total to at leats $4.35 billion.
It is not only Gold Coast receiving much needed investment because Brisbane sees $4.6 billion spent on it. $1 billion goes towards the replacement value of the existing heritage buildings at Treasury. Star is also investing $3.6 billion on the Queen’s Wharf Brisbane project.
$9 billion will be spent if the approved masterplan for the Gold Coast and Brisbane goes ahead as planned.
Investment Comes at a Testing Time
Star is investing this incredible sum of money despite reporting worrisome trading figures. Profits fells 8.4 per cent compared to its previous reporting period. The company still made $224 million profit, although this is a shortfall of $20 million compared to last year.
A lack of spending by International VIPs, who have been under the spotlight recently, was blamed. VIPs visited Star properties more than the previous tax year but spent far less per visit. While these VIPs generated $42.4 billion of turnover, that huge sum is 30.7 per cent less than previously recorded. Perhaps this new development can resurrect Star’s flagging fortunes. The beautiful location attracts plenty of tourists, Star just needs to attract high value VIPs and get them to spend.