The Star Entertainment Group (ASX: SGR) has broken ground on its latest development, the Dorsett Hotel, a $400 million addition to the company's growing South East Queensland portfolio.
The new tower will boast 316 hotel rooms as well as 423 one and two-bedroom apartments, adding a total 739 keys to the company's accommodation on Broadbeach Island alongside the existing Star Grand and The Darling.
Dorsett Hospitality International operates 54 hotels around the world and The Star Chairman John O'Neill says the brand's first foray on Australian soil will attract significant interest from the Asian market.
"This is a very important project for us and for the Gold Coast," says O'Neill.
"Dorsett Hospitality International has a massive footprint across Asia. That will ensure The Star Gold Coast has a heightened level of awareness and consideration from Asian guests because of the strength of the Dorsett brand in China, Hong Kong, Malaysia, Japan and Singapore."
Together with Chow Tai Fook, a Hong Kong-based conglomerate, and developer Far East Consortium, The Star has currently completed or planned investments in South East Queensland worth more than $4.5 billion.
Queensland Premier Annastacia Palaszczuk says The Star has invested more than $375 million on the Gold Coast.
The Premier looks forward to returning to the Gold Coast to open the new building in around three and a half years' time.
"With the Dorsett's construction, this takes the investment on Broadbeach island to $850m, demonstrating the ongoing confidence in the strength of our state's $25 billion tourism industry," says Palaszczuk.
"I'm looking forward to coming back for the opening of The Dorsett in 2022, we just don't know who the prime minister is going to be."
Breaking ground at The Dorsett
Star Entertainment profit hit by Darling opening and high roller win rate
While dignitaries broke ground at Broadbeach this morning, The Star also broke its FY18 results to the market which included a 44 per cent profit drop.
The $148 million result was heavily impacted by a low house-win rate in its International VIP Rebate business, as well as one-off expenses associated with opening The Darling Gold Coast earlier this year.
Although profits dipped, revenue rose by 6.1 per cent off the back of strong growth in the Sydney and Queensland markets.
The company's normalised results, which discount significant impairments and one-off costs, were high across the board and according to Chairman John O'Neill reflect the group's improvements over the past year.
"The Group remains focused on executing our long-standing strategy of investing in privileged assets to drive visitation and earnings," he says.
At the time of writing (12:57pm AEST), SGR shares are trading up 5 per cent at $5.25.
The group has also declared a final dividend of 13 cents per share, fully franked at the company tax rate of 30 per cent.\Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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