GGRAsia – Queen’s Wharf Brisbane delayed to 2H23, budget up

Queen’s Wharf Brisbane delayed to 2H23, budget up

Jul 29, 2022 Newsdesk Latest News, Top of the deck, World

Casino operator The Star Entertainment Group Ltd said in a Friday filing that the Queen’s Wharf Brisbane scheme (pictured) in Brisbane, in the state of Queensland in Australia, is now expected to open from the second half of 2023. The new time frame for the launch of the project, subject to various approvals, “represents a delay from prior guidance of mid-2023,” added the firm.

The Brisbane casino resort scheme is being developed by the Destination Brisbane Consortium, a joint venture between The Star Entertainment and two Hong Kong-based partners: Chow Tai Fook Enterprises Ltd, and Far East Consortium International Ltd.

In its Friday filing, The Star said the delay in construction was due to “higher-than-average rainfall” and the “impact of Covid-19” on the economy. The company also flagged an increase in costs to develop the project.

“Total project costs are expected to be up circa 10 percent on prior guidance of AUD2.6 billion [US$1.8 billion] due to escalating construction material costs, labour shortages, supply chain challenges and the programme delay as well as the inclusion of capital equipment required to open” the complex, said the casino firm.

“Pre-opening and other operational readiness costs would be in addition to this estimate,” it added.

According to the statement, The Star said it proposed, together with its joint venture partners, “to fund the majority of the increase in expected costs through additional equity contributions in accordance with the existing joint venture interests.”

JP Morgan Securities Australia Ltd said in a Sunday note, The Star’s cost guidance on Queen’s Wharf “provided more relief than surprise”.

Analysts Donald Carducci and Michael James stated: “Only 10 percent total project escalation from materials/labour/logistics gives the market confidence Queens Wharf will open from second half calendar year 2023 within a sensible cost parameter.”

The Star owns 50 percent of the venture, with the other half split equally between Chow Tai Fook and Far East Consortium.

“The remainder is expected to be funded from future operating cashflows,” the casino operator noted.

In June, the Queensland attorney general, Shannon Fentiman, announced an independent expert review on the suitability of The Star group to continue to hold gaming licences in Queensland.

(Updated Aug 1, 5.36pm)