Star Entertainment Group goes "capital lite"

The Star Entertainment Group is reportedly expecting its shareholders to embrace the casino operator's preference for "capital lite" investment after CEO Matt Bekier said that the company will not make any upfront payment for the construction of a 656-foot tower at its Jupiters casino on the Gold Coast.

The Star and Hong Kong investors Chow Tai Fook and Far East Consortium plan to each hold a 33 percent stake in the potential $400 million tower development, which the Sydney Morning Herald says will include 350 apartments and 700 hotel rooms.
 
Bekier said that the company expects to sell down its share of the apartment complex within the tower once it has been built, leaving its portion of the hotel to be funded with no capital investment from the company.

"The only injection we will put onto that part of the development is the land," Bekier said. "It doesn't get much more capital lite than that. If we had to fork out all of this ourselves and take on all the risk, we would not have done it. This extra investment doesn't put any stress on the balance sheet. If we had to put another $500 million into the Gold Coast, I don't think that would have flown and I don't think we could have justified the returns."

FREE DAILY NEWSLETTER

Like this story? Subscribe to IHIF!

The hospitality industry turns to IHIF International Hotel Investment News as the must-read source for investment and development coverage worldwide. Sign up today to get inside the deal with the latest transactions, openings, financing, and more delivered to your inbox and read on the go.

Jupiters is already in the middle of a $345 million redevelopment focused on renovating 600 existing hotel rooms and adding a six-star, 17-story hotel tower, which is already under construction.

According to the Herald, total investment in Jupiters (including the current redevelopment) could reach $850 million. This project would be the third project between the three partners, following their $3 billion deal to build the Queen's Wharf casino complex in Brisbane (set to open in 2022), and the potential development of a new tower and Ritz Carlton hotel at its flagship Sydney casino.

Source: Sydney Morning Herald

Read more on

Suggested Articles

Ahead of this week's Questex-sponsored Israel Hotel Investment Summit, Meitar Liquornik Geva Leshem Tal partner Carmit Bar-On talks opportunities.

According to STR’s latest hotel pipeline report, Europe has 1,620 hotels with 205,383 rooms under construction as of October. 

The 523-room city-center Hard Rock Hotel Prague is slated to open in 2023.