The new owners of the Treasury Casino building have put their cards on the table and will seek to transform the heritage-listed jewel into a retail/office showpiece.
One of the Brisbane CBD’s biggest landlords Charter Hall will pay $248m for Star Entertainment Group’s Casino and Treasury Hotel buildings and the Queen’s Gardens Car Park on George St in the Brisbane CBD in a partial leaseback deal.
The sale of the casino building will settled upon the opening of Queen’s Wharf in the first half of 2023.
Charter Hall managing director David Harrison said they will look at “a whole range of alternatives” for the historic former Treasury Building which should offer about 20,000sq m of space and benefit from the boom sparked by $3bn Queen’s Wharf precinct.
“We own a lot of heritage buildings that have been restored and repurposed so we are very comfortable with it,” he said.
“At this stage we will be looking at converting it into a mixed use office and retail building.”
The Treasury Hotel building and underground car park will be leased back to Star Entertainment on an initial term of 30 years with two 15-year options.
The lease terms imply an initial cap rate of 4.7 per cent and include fixed annual rent increases over the term of the lease.
The three assets will be put into Charter Hall’s unlisted $9bn wholesale Charter Hall Prime Office Fund.
Mr Harrison described the triple purchase as “strategic” because they also own Brisbane Square, at 266 George St, effectively giving them four major assets in a line.
“We obviously have vested interests in that part of Brisbane because we will own quite a few assets up there,” he said.
“The whole precinct is going to get upgraded, which is why we’ve been pretty bullish on that part of Brisbane. We think we can do some pretty creative things there.”
Star Entertainment said the transaction remained subject to Government approval.
“Under the sale agreement, obligations to the State to deliver the repurposing of these assets as part of the Queen’s Wharf Brisbane precinct remain,” they said.
Star will retain its existing interest in the former State Library building at 159 William St in the CBD, which is not part of the transaction.
“The Star will explore future uses and ownership models for this site,” Star said.
Star said the Charter Hall deal was consistent with its strategy of releasing capital from non-core or low-yielding assets. The transaction remained subject to government approval, it said.
“Under the sale agreement, obligations to the state to deliver the repurposing of these assets as part of the Queen’s Wharf Brisbane precinct remain,” they said.