Crown dealt blow as Melbourne skyscraper permit scrapped
Plans by the James Packer-backed casino giant Crown Resorts and the private Schiavello Group to build the $2 billion One Queensbridge hotel and apartment complex at Melbourne’s Southbank have been put in limbo after the Victorian government refused to extend the development permit.
The Victorian government has denied the pair a permit to extend the start time for construction of the massive project, just two weeks after they applied for the date to be pushed back.
Crown Resorts says that on February 20 it and joint venture partner, the Schiavello Group, formally applied to the Victorian Government for an extension to the construction commencement date for the planned One Queensbridge project.
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Crown was granted Victorian government approval for the complex in early 2017 but has been hamstrung by the increasingly tight funding environment.
The ambitious One Queensbridge project has been pitched as being taller than Melbourne’s famed Eureka Tower has approval for 388 hotel rooms and 708 apartments.
But the luxury unit market is plunging and a raft of new hotel openings has driven a softening in room rates, making the project harder to stack up.
At least five major apartment developments in Melbourne have also been dumped by their proponents with office developers snapping up those sites.
Crown Resorts said the pair had been informally notified by the Victorian government that an extension to the construction commencement date for the One Queensbridge project had been denied.
“No formal notice has been received from the Victorian Government but it is expected shortly,” Crown told the ASX.
The pair have previously said that the project was “subject to obtaining financing arrangements” that were satisfactory to Crown and Schiavello but a clamp down on lending by major banks and a pull back by Chinese groups from glitzy hotel projects, as well as a buyer drought, has derailed attempts to find a backer.
“Unfortunately these arrangements could not be achieved before the construction commencement date under the planning approval,” Crown said.
The listed casino company says it retained a 50% ownership interest in the land and “will consider the next steps for the property in conjunction with Schiavello”.
This article originally appeared on www.theaustralian.com.au/property.
