Annual Report 2019

ANNUAL REPORT 2019 45 MANAGEMENT DISCUSSION AND ANALYSIS Brisbane The Destination Brisbane Consortium, a joint venture between the Group, The Star and CTF, entered into development agreements with the Queensland State, Australia for the delivery of the QWB Project. The QWB Project comprises: (1) an integrated resort component in which the Group’s ownership is 25% (CTF owns 25% and The Star owns 50%) with an equity investment amoun t o f more t han AUD200 mi l l i on . Payments are made progressively commencing from signing of the QWB Project documents up to completion of the QWB Project which is expected by the end of FY2023; and (2) the residential component owned in the proportion of 50% by the Group and 50% by CTF. Together with the Group’s portion of land premium for this residential component, the total capital commitment of the Group is expected to be approximately AUD300 million which the Group intends to fund from its internal resources. The QWB Project encompasses a total area of approximately 9.4 hectares at Queen’s Wharf, Brisbane, and envisages three residential towers, five world-class hotels, high-end food and commercial outlets and a casino in Brisbane’s prime waterfront district. The total core development GFA of the QWB Project is expected to be 386,650 sq. m. of which approximately 160,250 sq. m. relates to the residential component. The QWB Project brings together the Group’s experience in international hospitality operation and mixed-use development, CTF’s extensive VIP customer base in Mainland China and Asian markets, as well as The Star’s operational experience in integrated resorts. The QWB Project is expected to contribute significantly to the Group’s recurring cash flow stream as well as to add to its residential development pipeline. The construction of the QWB Project is well underway with the excavation of the site close to completion, thereby substantially de-risking the construction of the development. Gold Coast The Star Residences is a mixed-use development featuring 5 towers in the heart of Gold Coast’s world- class integrated resort on Broadbeach Island. The project is an extension of the partnership between the Group, The Star and CTF in Gold Coast, in which the Group has a 33.3% interest. The first tower of the development will feature a 316- room Dorsett hotel and residential apartments with total saleable floor area of 295,000 sq. ft. and a GDV of HK$1.5 billion. Pre-sales of the residential component of the first tower was launched in September 2017, with pre-sales contracted for 83% of the GDV as at 31 March 2019. The completion of the first tower of the development is expected to take place in FY2022. Following the launch of the first tower, planning approval has been granted for the other four towers of the development. Epsilon, which is the second tower of the development, will feature a 210-room five-star hotel and residential apartments with total saleable floor area of 327,000 sq. ft. and a GDV of HK$2.0 billion. Pre-sales of the residential component was launched in May 2019. In addition, the strategic alliance agreement that was entered into with The Star and CTF in March 2018 stipulated that the parties will join forces on the delivery of certain nominated developments including the potential re- development of The Spit Precinct in Gold Coast. The realization of these potential developments will undoubtedly add to the Group’s development pipeline in the city, and will benefit the Group through its investment in The Star. Queen’s Wharf, Brisbane The Star Residences-Epsilon, Gold Coast