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."
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