James Packer was biding to develop the Brisbane casino
Echo Entertainment Group Ltd. won the right to develop a gambling resort in the center of Brisbane, fending off competition from billionaire James Packer’s Crown Resorts Ltd. which broke its Sydney casino monopoly two years ago.
A consortium led by Echo and including Chow Tai Fook Enterprises Ltd. and Far East Consortium International Ltd. will be the preferred bidder for the river-front site, Queensland state premier Annastacia Palaszczuk said in a media conference yesterday. The resort could cost as much as A$2 billion (USD1.5 billion), according to Credit Suisse Group AG.
The project is a wager that spending in Australia’s casinos can grow fast enough to absorb as many as three new major resorts over the next five years, even after gambling revenues in Macau fell 36 percent in June. The value of bets by high- rollers at Echo’s existing casinos almost doubled in the six months ended December as an anti-graft crackdown in China drove Macau gamblers elsewhere in the region, Echo said in February.
“This development will change Brisbane’s CBD,” Palaszczuk said yesterday. “I am very excited about the proposal and the project and we know what this means for Brisbane, making it a premium tourist destination.”
Queensland is hoping tourism revenues can offset the decline of a mining and petroleum investment boom. Mineral royalties will be about A$4.6 billion less over four years than previously forecast, according to the state’s July 14 budget.
China is Australia’s fastest-growing source of tourists and accounts for 18 percent of trip spending, according to government data — almost as much as the U.K. and U.S. put together.
Echo shares have gained 28 percent so far this year, amid analyst forecasts that net income will have almost doubled to A$201 million in the year ended June. Returns on the stock amounted to about 42 percent over the 12-month period compared to a 17 percent decline for Crown, the first time Echo’s outperformed its larger rival since the 2012 fiscal year.
The Echo-led consortium includes Chow Tai Fook and Far East with stakes of 25 percent each. It centers around a C-shaped hotel, with a roof garden overlooking the Brisbane River and glass-floored observation deck, according to masterplans on its website.
The state’s former Treasury building, which currently houses an Echo-owned casino, will be converted into a Ritz Carlton Hotel Co. site and a department store. Crown had planned a rival development in a consortium with property developer Greenland Investment Pty. David Fickling, Bloomberg
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