Star finally locks away $140m Sheraton Mirage deal
The international joint venture led by gaming company Star Entertainment has finalised its purchase of the Gold Coast’s Sheraton Mirage in a $140 million play that will give it an edge against James Packer’s Crown Resorts in the key south-east Queensland market.
The listed gaming company on has tied up a deal for the landmark beachfront resort in conjunction with Hong Kong developer Far East Consortium and retailer Chow Tai Fook, in a repeat of its $3 billion Brisbane Queen’s Wharf joint venture.
The trio will hold their interest via their Destination Gold Coast Investments fund, which has acquired the little-known Australian Wattle Developments that held an option to purchase the Sheraton Mirage. Star will take a half interest in the resort and the two Hong Kong parties will hold 25% apiece.
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The deal had been in the balance, with The Australian last week revealing a last-minute phone call changing the settlement venue in December had almost led to it falling over and prompting legal action in Queensland’s Supreme Court.
However, after more than a month of behind-the-scenes talks the resort has changed hands, with the sale to see the exit of Gold Coast-based MiiResorts, which granted the option to Australian Wattle. The sale puts an end to proposed court action.
The high-powered trio will become a major force in Queensland’s tourism industry, with a planned revamp of the Sheraton designed to complement Queen’s Wharf and the nearby Jupiters Hotel and Casino on the Broadbeach Island.
The hotel is run under a long-term management plan by Marriott International.
A Star spokesman confirmed settlement had occurred and the deal is expected to be unveiled today. “The Sheraton Grand Mirage is a tourism destination of true international standing. It has a spectacular beachfront location but is also part of a unique natural environment on The Spit,” he said.
Rival casino and integrated resort developer ASF is looking to capitalise on the location. It last month unveiled plans for a $3 billion resort, on a site south of Sea World. However, its plan has come under fire due to its scale and lack of clarity about its backers, despite naming Crown as preferred operator of its planned casino and hotel complex.
Star and its partners will likely avoid a high rise development or a gaming facility, with the focus on overhauling the ageing resort in tandem with the exiting operator. This could see new signature restaurants or leisure options for patrons visiting its Queensland casinos.
“Any enhancements, over time, will be sympathetic to the character of an area that has a special place in the hearts of the Gold Coast community,” a Star spokesman says.
“Importantly, it is also complementary to our other properties and allows us to offer guests both from Australia and overseas a variety of experiences, from the urban to the laid back and beachfront.”
The hotel’s value has shot up as the Gold Coast has come back into vogue but the sale has not been without controversy.
MiiResorts — previously known as Pearls Australasia, the local arm of Indian conglomerate Pearls — paid $62.5 million for the iconic hotel in 2008.
The company is involved in a Federal Court case that alleges funding for the 2008 purchase of the resort, and the $20 million in upgrades made to it, were undertaken with money raised in India as a result of a $9 billion illegal fraud of 58.5 million local investors.
The action seeks to recoup money from the resort’s sale and repatriate it to India.
– with Rosanne Barrett
This article originally appeared on www.theaustralian.com.au/property.