Crown Resorts Sells Melbourne Property Once Targeted for Skyscraper

Posted on: October 21, 2024, 10:40h. 

Last updated on: October 21, 2024, 11:03h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Crown Resorts has found a buyer for its One Queensbridge development site as the Australian casino company continues to unload underutilized assets to strengthen its bottom line and recoup losses stemming from recent government inquiries.

Crown Resorts Melbourne Queensbridge
Crown Resorts has sold a strip of vacant buildings along Queens Bridge Street in Melbourne near its Crown Melbourne casino resort. Crown had planned to build a hotel and residential tower at the property dubbed One Queensbridge. (Image: Google Maps)

Crown, owned by US-based private equity titan Blackstone, recently sold 1-29 Queens Bridge Street to commercial real estate group PDG. The Australian Financial Review reports the selling price was AU$85 million (US$57 million).

The nearly 1.3-acre property consists of the long-shuttered, two-story Queens Bridge Hotel and four adjacent boarded-up office and retail buildings.

In 2017, when Crown was still under the control of its billionaire founder James Packer, the company acquired 1-29 Queens Bridge with plans to build a 90-story skyscraper housing 388 hotel suites and more than 700 private residences. The building, which would have been Melbourne’s tallest, was to connect across Queens Bridge St. to the Crown Melbourne resort and casino. 

Project Downturn

Crown Resorts was partnered with Schiavello Group, an Aussie property developer, on the One Queensbridge development. The partnership stalled the hotel and residency tower in 2019 because of slowing apartment demand downtown.

During the 2020 pandemic, Crown bought out Schiavello’s 50% stake in the project for AU$80 million. Months later, an inquiry in New South Wales into Crown’s suitability to possess a gaming license for its new resort in Sydney found that the company failed to protect its casinos in Melbourne and Perth from being used to launder money, and did little to keep criminals off of the resorts’ premises.

The NSW findings sparked inquiries in Victoria and Western Australia. Those probes reached similar conclusions and led to Packer’s ousting and forcible sell-off of his stake in the company he founded.

In 2022, Blackstone took Crown private in a takeover valued at AU$8.9 billion. Blackstone paid AU$450 million in fines after Crown was deemed unsuitable to hold gaming licenses by state officials in exchange for Crown being allowed to continue running its casinos under government-appointed monitors. Blackstone invested another AU$130 million to improve the company’s operations and become compliant.

Crown has since been deemed suitable in NSW and Victoria. The firm hopes to field a suitability determination in Western Australia in the coming months.

Crown Selloff Continues

Crown Resorts narrowed its annual fiscal loss in 2024 to AU$165 million from AU$199 million in FY2023. The company’s revenue, however, declined 0.2%.

Crown’s bottom line was strengthened as Blackstone divested assets. In July, Blackstone sold Crown’s 20% position in restaurant and hotelier Nobu for AU$1.3 billion.

The company is reportedly open to offers for its high-end Crown Aspinalls Club in London, a swanky members-only casino in Mayfair. The posh property has seen a downturn in VIP play in recent years after the British government scrapped the duty-free system afforded to foreign visitors. That’s led to fewer high rollers visiting London from the Arab Gulf states, many of whom patronized Aspinalls to get their gambling fix.

Crown and Blackstone are additionally said to be exploring a deal to sell the Capital Golf Club, an ultra-exclusive private golf club designed by famed golfer and course architect Peter Thomson.