The Star Entertainment Group has sold the Treasury Casino and Hotel buildings in Brisbane, as well as the Queen’s Gardens Car Park, for AU$248m (US$186m).
The deal will see holdings company Charter Hall assume ownership of the properties in a sale and partial lease back transaction with the Australian casino giant, in keeping with its purported strategy of releasing capital from non-core or low-yielding assets.
The Star will lease back the car park and Treasury Hotel building for an initial period of 30 years, with two 15-year options. According to The Star, the terms of the lease imply an initial cap rate of 4.7% and include fixed annual rent increases over its duration.
The casino company will also retain its existing interest in the former State Library building, the smallest of the four Treasury assets, as The Star claims it intends to explore future uses and ownership models for this site.
While the agreement allows for the early settlement of the hotel building and car park, the companies cannot settle for the Treasury Casino property until the opening of the Queen’s Wharf development, expected in the first half of 2023.
Also located in Brisbane, this AU$3.6bn integrated resort project — which The Star bills as a ‘game-changer’ — is a joint venture between the gambling group and its Hong Kong-based partners; Chow Tai Fook Enterprises and Far East Consortium.
Moreover, the Treasury properties deal still requires state approval, with The Star saying in a statement: “The transaction remains subject to state consent. 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.”