James Packer’s Crown Resorts is acquiring an interest in four adjoining parcels of land opposite the Crown Melbourne Integrated Resort to build another luxury hotel.
The land is controlled by the Schiavello Group, a private construction company, and Crown has agreed to an initial investment of $50 million to participate in a joint development of the project.
Crown and the Schiavello Group are negotiating joint venture arrangements and finalising designs for a five-star hotel and apartment complex.
They have agreed in principle that Crown has the right to acquire and manage the hotel on completion and the Schiavello Group will have the right to acquire an office and showroom area within the complex.
The parties will share the apartment development 50/50. No gaming operations are planned for the building.
The development is subject to negotiation of a final joint venture agreement, financing arrangements and a construction contract with a builder as well as planning and other government approvals.
James Packer, the chairman of Crown, says the project will create hundreds of additional hospitality and tourism jobs and training opportunities.
“While Crown continues its domestic and global expansion, Crown Melbourne remains our flagship resort and this project will ensure it remains the best integrated resort in Australia and amongst the best in the world,” he says.
“Crown Melbourne’s success in attracting international and interstate tourists is highlighted by the occupancy levels at our three hotels, which are consistently over 90%.
“This demonstrates an urgent need for more hotel capacity at Crown Melbourne to meet both current and future demand.
“A new luxury Crown managed hotel will assist Melbourne to attract more high net worth tourists and reinforce Melbourne’s appeal as a destination for important international conferences, sporting and cultural events.”
Crown Resort shares are up 0.85% to $13.21.