Star Gold Coast master plan approved by the Queensland government
The Star Entertainment Group have received approval of their master plan of accommodation, entertainment and retail options, food and drink establishments, and resorts by the Queensland state government.
CasinoAus reports that as part of the development, the Gold Coast Convention and Exhibition Centre will be upgraded. The venue of 6000 seats will undergo major works with the intention of attracting some of the world’s biggest music stars.
The Star bought the Sheraton Grand Mirage in 2017 for $140 million with its intention of upgrading the facility, which forms part of the approval. The renovations will also see a new restaurant, bar, gym, beach club, and adjoining low-rise development.
Five new towers will be developed around The Star Gold Coast. Two of them are in process with the masterplan to increase the number to five which will include a five-star hotel. The Star also wish to add a Sky Park tourism playground which will provide “adventure, entertainment, and luxury dining.”
A large part of the project will rely on its relationship with two major joint venture partners: Chow Tai Fook Enterprises Limited and the Far East Consortium International Limited.
Chow Tai Fook Enterprises is operated by the Cheng family who are out of Hong Kong. The organisation have a diversified portfolio that includes real estate, hospitality, and consumer investments.
The Far East Consortium began working in Australia in the 1990s and focus on residential and hotel developments. The group have facilitated the development of apartment buildings located in the Upper West Side, The Fifth, West Side Place, Flinders Wharf, and Royal Domain.
The Star earlier this year proposed a second casino on the Gold Coast.
Latest proposal doesn’t include a second casino
However, after months of discussions, the latest proposal does not include a second casino. Star Chairman John O’Neill conceded that having two may have been too much. “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.”
O’Neill also added that “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.”
In the seven years that a second casino has been up for discussion, O’Neill mentioned that it has only cost everyone involved and weighed negatively on Star’s share prices.
The Star wants to ensure some of the numbers to catch the attention of decision-makers who must approve the project.
One promise is for new jobs in Queensland with the project supposed to add 1,800 construction jobs per tower and 3,000 new jobs once the towers are open for business.
Of the entire $9 billion in total investment proposed, the funds will be split between the Gold Coast and Brisbane.
The Star’s fiscal year report for the year ending June 30, 2019 received a mixed response from shareholders and industry analysts.
Figures from the report showed adjusted revenue down 1%, adjusted EBITDA down 2%, and adjusted net profit after tax down 8.4%.
VIP business reported a 30.7% decrease with core earnings down 35.6%. Visitors in general for the organisation were down with the spend per visitor down more than 30%.
The report also mentioned promises of job cuts and a “planned restructuring”, which may suggest the multi-billion-dollar project falls into that category.
Initial responses from investors and shareholders has been positive to the approval of the masterplan. Share prices lifted from $4.435 to a high of $4.855 as the news has spread.