The Star Secures $53M Deal, Exits Brisbane JV, Gains Full Gold Coast Hotel Ownership

Strategic Shift in Brisbane and Gold Coast Holdings

The Star Entertainment Group (ASX, SGR) has taken a decisive step in reshaping its property portfolio by executing binding long-form agreements with its joint venture partners, Chow Tai Fook Enterprises Limited and Far East Consortium International Limited. This transaction marks The Star’s planned exit from its 50% equity interest in the Destination Brisbane Consortium (DBC), owner of the Queen's Wharf Brisbane Integrated Resort, while simultaneously consolidating its position in the Gold Coast market.

The deal is structured to complete in two distinct stages. The first stage, the exit from DBC, is targeted for completion by 30 November 2025. The second stage, involving the transfer of remaining Brisbane assets including the Destination Gold Coast Consortium (DGCC) and Treasury Brisbane properties, is expected to conclude in the second half of 2026, subject to regulatory and lender approvals.

Financial and Operational Implications

Under the terms, The Star will receive $53 million in cash consideration, with $45 million already paid earlier in 2025 and the remaining $8 million payable by November 2025 or upon practical completion of the Andaz hotel on the Gold Coast. In exchange, The Star relinquishes its 50% stake in DBC and associated Brisbane assets, including the Treasury Brisbane Hotel and car parks.

Significantly, The Star will be released from its parent company guarantees related to DBC’s $1.4 billion debt facility, and will no longer be required to fund substantial future equity contributions, which had been forecast at over $212 million from March 2025 onwards. This alleviates considerable financial pressure and risk exposure for the company.

Operationally, management of the Queen's Wharf Brisbane Integrated Resort will transition to a replacement operator, nominated by the joint venture partners, with The Star committed to facilitating a smooth handover under agreed transition protocols. The company will receive fixed monthly operator fees escalating from $5 million to $7 million between now and mid-2028, replacing the previous variable fee structure tied to casino revenues.

Consolidation and Growth on the Gold Coast

On the Gold Coast, The Star is set to increase its stake from 33.3% to 100% in the Dorsett and Andaz hotels, acquiring full ownership and management rights. This move strengthens The Star’s foothold in a key leisure and tourism market, with exclusive development rights over future towers at the Gold Coast property, including an option to buy out joint venture partners’ interests in upcoming developments.

The transaction also includes an earn-out arrangement, where The Star could receive up to $225 million in 2030 based on the equity value of DBC, calculated using a multiple of earnings before interest, taxes, depreciation, and amortisation (EBITDA) less net debt. This introduces a potential upside linked to the future performance of the Brisbane assets despite the exit.

Regulatory and Completion Conditions

Completion of both stages remains conditional on a range of regulatory approvals, lender consents, and government accommodations, including Foreign Investment Review Board (FIRB) clearance and Queensland State Government approvals. The Star has secured support from its subordinated lenders, Bally’s Corporation and Investment Holdings Pty Ltd, which is critical for the transaction’s progress.

Should the transaction fail to complete, unwind provisions are in place to restore parties to their pre-transaction positions, including repayment obligations and asset transfers. However, certain amendments to the casino management agreement will persist, reflecting the complex operational changes underway.

This transaction supersedes previous arrangements and signals a strategic pivot for The Star, balancing risk reduction in Brisbane with growth ambitions on the Gold Coast.