Sydney’s Star Casino to charge $200m-plus for car park
Gaming heavyweight Star Entertainment has tapped Macquarie Capital to sell the car park concession at its Sydney casino in a move that could reap more than $200 million.
Star is seeking a group that specialises in owning and operating car parks to oversee the 2800-bay car park that sits beneath its landmark property in Pyrmont.
While the process is just getting under way with registrations of interest, the company is likely to make a decision about how to proceed with a transaction by mid-year.
The move would help the company to trim debt and free up proceeds to pour into its substantial development pipeline, which includes a revamp of the Pyrmont site.
Existing parking arrangements would be retained, with the focus for any new operator likely to be on improving the car park’s performance during the relatively quiet weekday periods.
Rival gaming company SKYCITY Entertainment Group last year sold the concession to operate its Auckland carparks to Macquarie Principal Finance for $NZ220m, with the licence to operate SKYCITY Auckland’s 3200 car park spaces until 2048.
The sale price implied an earnings multiple of about 12.5 times but the Sydney deal could attract a premium as parking is scarce and the area is growing.
In the Sydney deal, Star Entertainment is expected to draw interest from global pension funds, acquisitive funds managers and major operators keen to run the car park.
Pricing is likely to be driven by low bond yields and the lack of correlation to the volatile global sharemarket.
There is a strong growth element in the car-parking operations as Pyrmont is subject to a planning review that will also probably enable greater development of the residential and commercial buildings.
There is already a cluster of major companies in Pyrmont, including Google.
This article originally appeared on www.theaustralian.com.au/property.
