The Star Entertainment Group has sold three assets on its casino complex in Brisbane to Charter Hall on a partial leaseback basis for A$248m (€160m).

The assets, Treasury Hotel Building, Treasury Casino Building and Queens Gardens Car Park, will be held in the flagship Charter Hall Prime Office Fund (CPOF).

David Harrison, Charter Hall CEO, told IPE Real Assets: “This portfolio provides a 30-year WALE across 70% of the portfolio, with a value-add lease to core opportunity on the Treasury building that will be vacated in 2023 when CPOF settles.

“This will extend Charter Hall’s investment in Brisbane, weighted toward the exciting evolution of the North Quarter precinct driven by development of Queens Wharf.” The A$3.6bn redevelopment of Queens Street Wharf is the largest urban renewal project in Brisbane.

Asked why an office fund would buy a hotel and a casino, a source told IPE Assets: “This transaction is in line with CPOF’s investment strategy of acquiring long-leased assets with attractive fixed annual rental increases, underpinned by strong tenant covenants to ensure resilience of the fund’s cash flows.”

Under the terms of the transaction, The Star will lease back the car park and the Treasury Hotel building for an initial term of 30 years, with a further two 15-year options.

In its statement, The Star said the sale was “consistent with The Star’s strategy of releasing capital from non-core or low-yielding assets.

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