Star Entertainment could offload The Darling hotel for $170M to $200M
Star Entertainment is looking to offload some of its best hospitality and property assets to help rebalance its books and rescue its gambling business.
One of the biggest assets for sale is the 171-room hotel The Darling hotel, with the struggling entertainment giant already fielding offers for the five-star Sydney property which is expected to seel between $170 million to $200 million.
The Australian reports Star Entertainment had directly sought to interest Asian buyers along with high-powered local buyers. However, according to insiders, interest has already been shown by prospective buyers.
“Interest will come from Australian high-net-worth individuals, particularly if they can get vacant possession given it has had $30 million to $40 million spent on a refurbishment,” one agent said.
Meanwhile, one hotel investor highlighted the opportunity: “This hotel will bring significant interest. According to the Dransfield Report Sydney is one of the strongest markets in Australia and there is not a lot of stock turning over. It’s a good opportunity.”
One agent said Singaporean investors would be interested in the $380 a night rent.
Star has already sold the leasehold interest in the Treasury Brisbane to Griffith University for $67.5 million, netting $60.7 million after settlement adjustments. The company is now seeking buyers for two related properties.
An offshore party has been conducting due diligence on the Treasury Hotel, for which Star is running a new sale process that could bring in around $40 million.
A local party is in due diligence for the carpark, valued at approximately $50 million.
These sales may signal additional asset offloading, as the casino group previously attempted to sell the Sydney property's carpark in 2020 before regulatory issues led to significant writedowns.
Incoming chief executive Steve McCann told investors the company had “quite a number of non-core assets”.
“What we obviously need to do is make sure if we’re selling assets, they’re not having a material negative impact on revenue,” McCann said.
“And we believe that there are opportunities that relate to those hotels where we can secure enough room nights for our customers as part of a transaction and still get a good outcome.”
Star Entertainment came out of its trading halt last Friday, having plummeted 44 per cent to just 25 cents.
Jonathan Jackson, 1st October 2024
