Crown Resorts Sells One Queensbridge Site for $85 Million
Crown Resorts has completed the sale of the One Queensbridge development site in Melbourne for AU$85 million as part of a broader strategy by its owner, Blackstone, to address recent financial difficulties.
One Queensbridge, Melbourne. Crown Resorts completes deal to sell One Queensbridge.
LISTEN TO THIS ARTICLE:The sale, finalized in August, is part of a strategic change for Crown. The company initially had ambitious plans to build a $1.75 billion hotel and apartment tower on the site. However, the project, which was to feature 90 floors and become Melbourne’s tallest building, was halted in 2019 when plans were abandoned.
Sale Comes After Nobu Divestment
The latest transaction follows Crown’s earlier decision to divest its 20 percent stake in Nobu, a globally renowned restaurant chain co-owned by actor Robert De Niro. That deal was valued at $1.3 billion.
There have also been reports that Crown is considering selling other assets, including a prestigious golf club in Melbourne and the upscale Aspinall’s Club in London.
Since acquiring Crown Resorts for $8.9 billion in 2022, Blackstone has been focused on shedding non-essential assets to improve the company’s financial health. In 2023, the private equity group reportedly injected nearly $500 million into Crown Resorts in order to pay penalties related to violations of anti-money laundering (AML) and counter-terrorism financing (CTF) laws.
Crown’s latest disclosures to the Australian Securities and Investments Commission (ASIC) detailed agreements to sell various properties, including one of its private jets, a Bombardier Global Express XRS.
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Deal Includes Profit-Sharing Clause
Originally, the One Queensbridge project was a joint venture with the Schiavello Group. In 2020, Crown purchased Schiavello’s 50% stake for $80 million with plans to develop a fourth hotel under its brand. Although the development was ultimately scrapped, the recent sale includes a profit-sharing clause. This could lead to additional earnings for Crown if the new owner, PDG, a commercial property developer, secures permits and proceeds with the project.
For the fiscal year ending June 30, 2024, Crown Resorts reported a reduced loss of $164.8 million, a 17.4% improvement from the $199 million loss the previous year. However, the improvement was primarily driven by cost reductions rather than increased business activity. Revenue for the company was $2.8 billion, a slight decrease of 0.2% from the previous fiscal year.
Crown’s recent problems are the result of a series of inquiries that found the company unsuitable to operate casinos at its locations in Sydney, Melbourne, and Perth. The investigations found ongoing issues related to money laundering oversight, responsible gambling measures, tax compliance, and other regulatory matters. However, following extensive reforms under the leadership of CEO Ciarán Carruthers, Crown has managed to restore its casino licenses in New South Wales and Victoria.
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