Lasseters Casino owner Sam Arnaout plans $100m revamp as Iris Capital becomes Queen of the Desert
One of Australia’s fastest-growing hospitality outfits, Sam Arnaout’s Iris Capital, plans a major $100m redevelopment of its newly purchased Lasseters Hotel Casino, with plans to create a world-class tourism resort in Alice Springs.
The Sydney-based company is expected to settle the $105m acquisition of the Alice Springs casino resort this week, and has announced plans for a major transformation for the property to capitalise on a travel-hungry domestic tourist market as interstate and international borders reopen.
The proposed development will also beef up Lasseters’ residential offering, with the company saying Alice Springs is short on residential accommodation for locals as well as the mining community.
Iris Capital acquired Lasseters Hotel Casino from its long-time owner, the Singapore-listed group Lasseters International Holdings, after securing regulatory approval from the Northern Territory government to operate the casino following a seven-month process with approval granted on October 8.
With more than 30 pubs and 20 hotels, including its $178m acquisition of 17 Ibis hotels as part of the Accor Invest portfolio, the company is one of Australia’s largest privately owned property and hospitality groups.
That deal added more than 2000 rooms to the Iris Capital portfolio, with the Lasseters acquisition boosting that number further.
Lasseters Hotel Casino, which shot to fame in the 1994 Australian feature film The Adventures of Priscilla, Queen of the Desert, is a 4.5-star hotel resort with 205 rooms operated by the InterContinental Hotel Group.
The purchase, on which HTL Property advised, includes the Alice Springs Convention Centre, with 320 pokies plus restaurants and bars.
Iris Capital is planning a major expansion of the resort assets, including construction of a hotel, an upgraded convention centre and a residential offering that is expected to reposition the property attracting domestic and international tourists.
“We are well advanced in discussions with the NT government in relation to recapitalising the asset,” Mr Arnaout said in a statement.
Mr Arnaout told The Australian that he had been in the pub game for 25 years and his plan was to retain Lasseters as a long-term hold like the rest of his portfolio.
He is unfazed by owning a casino, saying his 30 pubs have more than 1000 gaming machines so he is well versed in managing gaming as well as hospitality. “Lasseters is just a larger format,’’ he said.
“We have been in the business for 25 years.
“It’s been a slow burn, it’s been shoulder to the wheel for 20 years; certainly the last few years has been our strongest growth, on the back of some very successful property developments.”
Mr Lassiter said he did not have a financial partner.
“We have no backer, Iris is independently rising on its strength,” he said.
On the development side, the company’s property interests, including the $1bn East End development in Newcastle including land subdivisions, have just come to fruition after five years.
“Our master plan for Lasseters incorporates a new hotel offering within a fully integrated resort and includes a repositioned casino floor with significantly expanded food and beverage offerings,’’ Mr Arnaout said.
“The investment is aimed at capturing pent-up demand for new domestic tourism destinations, as well as the international travel market, while also capitalising on the mining industry’s connection to the region.”
In a statement, he said Iris Capital’s plans aligned with the vision of the NT government and Tourism NT for Alice Springs to be Australia’s “inland capital” by enhancing its appeal as a global tourism icon and by delivering on a pipeline of existing and upcoming major projects providing significant investment and job creation in Central Australia.
“We are taking a first-mover position with a significant investment that we believe will provide the catalyst for further investment in the region,” he said.
“We’re putting the pedal to the metal to make sure the hotel and casino are ready to go in line with the government’s tourism vision for the region. We believe our plans will be a major shot in the arm for local stakeholders and other investors.
“With international flights already servicing Alice Springs, the infrastructure is there for this region to attract further investment by tourism operators and bring the Red Centre closer to a travel-hungry world market.”
However, Mr Arnaout said Iris Capital’s plans for Lasseters Hotel Casino were still subject to government approvals.
“I am incredibly proud that our company has been recognised as being a fit and proper organisation to operate this premium NT asset,” he said.
“We look forward to continuing to work with the government to realise the asset for the benefit of the state and the community.”
Over more than 25 years, Iris Capital’s investment and development activities have created $3bn in enterprise value for the company.
The group generates annual revenue of $500m and employs more than 1200 people across Australia.
Iris Capital recently announced an $800m redevelopment of Niecon Plaza in Broadbeach on the Gold Coast, which will transform the heart of the tourism capital’s booming beachside suburb. In Sydney’s Kings Cross, the company is transforming the old Bourbon & Beefsteak hotel into blocks of luxury apartments.