In early March, The Star indicated it had entered into a “binding” heads of agreement (HoA) which kickstarts the process that would see its two co-investors in the $3.6 billion Queen’s Wharf development on Brisbane River take over The Star’s 50 per cent share, in return for The Star acquiring full ownership in The Star Gold Coast, in which the trio are also the sole investors.
Today, the two other joint venture partners, Chow Tai Fook Enterprises and Far East Consortium, have given notice to terminate the HoA, which will take effect next Monday, unless it is withdrawn before then.
The termination notice follows the failure of the three parties to enter into long form documents for the sale by April 30, which opened the door to the cancellation of the original agreement on five working days’ notice.
If the HoA is terminated, The Star will be on the hook to pay its co-investors $10 million within 30 days and will not receive an expected $8 million from the buyers, which was part of the original agreement to sell. The Star has already received $45 million from the two other joint venture partners.
A failure to offload its investment in Queen’s Wharf would also presumably see The Star back on the hook for further financial contributions to the completion of Queen’s Wharf. The Star expected to pay $212 million towards the development before it arranged to exit its investment.
The Star said earlier today that the three parties in the sale had still “not reached an agreement on the outstanding commercial issues” as of this morning but that The Star “remains willing to continue negotiations with the Joint Venture Partners to give effect to the DBC [Destination Brisbane Consortium] transaction”.
Queen’s Wharf contains a significant inventory of both luxury hotel and short term accommodation rooms and apartments alongside multiple event spaces, including an Events Centre that is part of The Star’s offering there.
