An A$500 million ($365 million) hotel and condo project in Sydney backed by two of Hong Kong’s wealthiest families filed plans last week for a 61-storey tower incorporating the city’s only Ritz-Carlton hotel, as casino operator Star Entertainment Group expands a gaming empire supported by jewelry chain Chow Tai Fook and developer Far East Consortium.
ASX-listed Star announced the development application for The Star Sydney in a press release dated 15 August, noting that the tower would be Australia’s second largest casino upon its completion. In addition to the 220-room Ritz-Carlton, the project will include 200 residences, without adding to gaming space at the existing casino beside the tower.
In announcing the new attraction, Star representatives noted the joint venture’s hopes for capitalising on growing demand from Chinese visitors as the casino operator continues to expand on its cooperation with Chow Tai Fook and FEC after the Hong Kong heavyweights combined to invest A$490 million in Star during March of this year.
Betting on China Numbers
“Australia currently attracts just one percent of China’s international
outbound travellers,” Matt Bekier, CEO of Star Entertainment said in the statement, while noting that overall visitor numbers to the country are expected to nearly double within the next decade.
The company is betting on those increased tourist numbers, especially from China, and the need for more luxury rooms to accommodate them.
“To cater for that demand, we need the necessary tourism infrastructure. Sydney lacks sufficient high-end hotels to meet this wave of international tourist demand, led by the rapidly expanding wealthy Chinese middle-class demographic,” Bekier went on to say.
Aussie Casino Operator Builds on Hong Kong Ties
The plans for the new tower were filed just five months after Star raised A$490 million from Chow Tai Fook and FEC, selling 4.99 percent stakes to each of the Hong Kong concerns for A$245 million.
Star’s Hong Kong relationships give it backing from the Cheng family that controls New World Development, as well as Chow Tai Fook, and from chairman David Chiu’s Far East Consortium as the Aussie gaming operator pursues Asian high rollers.
The relationship between Chow Tai Fook, FEC and Star first became evident in 2015 when the two Hong Kong companies backed Star’s successful bid to win the rights to develop the A$3 billion Queen’s Wharf casino in Brisbane, when Star was still known as the Echo Entertainment Group. Now the partners are already pointing to additional deals.
Expanding Their Global Gaming Empires
“We look forward to receiving the necessary approval, allowing us to proceed with Chow Tai Fook
and Far East with whom we’re already partnering on transformational projects at Queen’s Wharf
Brisbane and The Star Gold Coast,” Bekier noted in the statement.
As part of the March investment by Chow Tai Fook and FEC, the three companies also entered a strategic alliance to pursue building of up to five towers in the Star Gold Coast Precinct as well as for the expansion of the Sydney Star.
This Australian gaming-oriented approach to development parallels moves by both Chow Tai Fook and FEC in other markets in Asia and the Americas.
In 2015, Chow Tai Fook said it would be investing $2.6 billion in a casino at Incheon, South Korea and that it was also investing in a long-stalled $4 billion casino in Quang Nam Province, Vietnam. At the end of 2016, Chow Tai Fook took over a bankrupt $3.5 billion Bahama’s casino. Through New World and other corporate entities, the Cheng family also has extensive hospitality interests including the New World hotels and Rosewood Hotels and Resorts.
FEC has also been investing in gaming including a deal in March of this year, to acquire Nevada-based casino operator Trans World Corporation for $42 million. That acquisition gave the Hong Kong developer controlling interests in hotels in Germany, Austria and the Czech Republic as well as three casinos in the Czech Republic.