The Star Secures $1.6 Billion Brisbane Funding
The Star Entertainment Group’s Queens Wharf Brisbane project continues despite the economic downturn caused by the COVID-19 pandemic. The Star secured a massive $1.6 billion worth of funding to help progress the Brisbane casino and entertainment complex.
An announcement to the Australian Stock Exchange revealed the funding details. The company revealed receipt of a $1.6 billion project-level debt in its H1 FY2020 results last week.
“The Star and its joint venture partners in the Destination Brisbane Consortium have now executed facility agreements for the QWB Funding on terms consistent with the commitments received. These terms were agreed prior to the COVID-19 pandemic and therefore reflect the terms available in the market at that time.”
Star revealed its first draw-down on the $1.6 billion is expected in June 2020. A second draw-down on the debt facility is funding construction commencing in early 2021. The loan period is for 5.5 years, meaning the venue will be open for three years before refinancing is required.
It added, “construction at Queen’s Wharf Brisbane is continuing, with the project remaining on time and on budget.”
Brisbane Project Set To Complete in 2022
Queensland’s government approved the development of the Queen’s Wharf Brisbane project in late 2017. Destination Brisbane Consortium proposed a $3 billion venue complete with a new casino, hotels and a residential area.
Star Entertainment has teamed up with Chow Tai Fook Enterprises and Far East Consortium for the huge project. It spans 27.3 hectares made up of 12 hectares of government-owned land and reclaiming 15.3 hectares of the Brisbane River.
Five hotels and a luxurious casino are the main features of the project, hence Star’s involvement. Plans show up to 50 restaurants and bars, plus 2,000 residential apartments and retail units.
Plans also show several new buildings, including towers up to 74 storeys. The site has existing heritage-listed buildings forcing Star to integrate new buildings into them.
Ground was broke in March 2018 with Queensland Premier Annastacia Palaszczuk in attendance. Palaszczuk turned down proposals for a new casino at Gold Coast City and Sunshine Coast, but approved this one.
Little has been said about the new casino except its gaming floor makes up 5% of the complex. Star seems more interested in the retail and residential units; it does have to sell these after all.
The project has been good for the local economy with approximately 2,000 construction jobs created. Star believes 8,000 permanent jobs will become available once construction is complete.
Plans have altered slightly since ground was broke, resulting in the total cost increasing to $3.6 billion. Late 2022 is the rough date pencilled in for the grand opening. They are still aiming for this date despite the currency COVID-19 crisis.
Funding a Kick in the Teeth For Star Employees
It is great news the Brisbane development continues as planned, especially for the 8,000 construction workers employed for its construction, but funding $1.6 billion is a kick in the teeth for Star’s employees.
The Star recently stood down approximately 90% of its staff as a cost-cutting measure. These people are now without work and relying on government handouts to survive. Nobody is 100% sure when these employees will return to work. It’s unlikely Star will recall all of them. Levels of business will be far lower than they were pre-pandemic. Some Star employees face the stark prospect of not earning a living for a long time.
Star is a forward-thinking company and the Brisbane project is an investment in the future. One can’t help but wonder why it isn’t investing in its people right now. Those people helped build Star to such lofty heights that banks lend it $1.6 billion. A couple of extra million loaned would have gone a long way to helping these people.