Property editor of the NZ Herald

SkyCity explains what's stopping $318m Adelaide project

11-level 25,000sq m hotel and expanded casino not started
SkyCity's plans for a new A$300m building in Adelaide.
SkyCity's plans for a new A$300m building in Adelaide.

Carparking and regulatory issues need to be resolved before SkyCity Entertainment Group decides whether to go ahead with A$300 million (NZ$318m) Adelaide expansion plans, the business says.

A SkyCity spokesman yesterday explained details about the scheme, planned since around 2012 and cited in yesterday's half-year result.

"The Adelaide expansion project remains contingent on the successful resolution of our ongoing discussions with the South Australia state government and the Walker Corporation," he said.

"We are still in the process of finalising an agreement with Walker to lease car parks in a new development they are building on the Adelaide riverbank adjacent our property. We also have to finalise various planning and regulatory issues with the state government.

"As with any project worth $A300m (NZ$318m) it requires the full consideration of the board, as the project must be value-enhancing for shareholders.

We remain hopeful that the outstanding issues will be resolved shortly however," he said.

Analysts yesterday wondered about the plans after the half-year result was released with new information saying Adelaide was "under consideration by the board". Craig Lindberg of Craigs Investment Partners and Peter Turnbull of First NZ Capital both raised the issue in notes following the result released to the NZX.

In 2014, SkyCity discussed plans for an 11-level 25,000sq m hotel and expanded casino rise on an adjoining site by the Festival Centre in front of the Torrens River.

The Adelaide Casino project was designed by the Buchan Group under principal David Cole, working with Bates Smart Architects, the Herald reported in 2014. At the time, SkyCity chief executive Nigel Morrison said the upgrade would result in the casino and hotel becoming the jewel in the crown of Adelaide's Riverbank Precinct.

The Herald visited the Adelaide site in 2014 and met business development and investor relations general manager Aaron Morrison who told of changes to the existing casino in the 1800s railway station, but also of the expansion plans which included a new 100-room six-star hotel to be built in a glass-front development.

"This is for the purposes of attracting and accommodating interstate and international customers," Aaron Morrison said at the time.

But carparking was an issue yet to be resolved at that time, he said. There was an opportunity to create a civic square with 1500 carparks beneath it but Sydney developer Lang Walker had the rights to that, Morrison said.

But a year later at SkyCity's AGM, shareholders heard that a final decision was due to be made within the next three to four months after further negotiations with the South Australian government over the lease on the land and confirmation SkyCity will get at least 750 spaces in the planned 1500 to 1900-space carpark being built as part of the broader development of the Riverbank precinct.

The company was then expecting to begin ground works on the Adelaide expansion within about a year.

The building costs were estimated in 2015 as $272m to $294m for the hotel, a further $11m to $13m for the land, and $32m to $38m for other associated costs.

- NZ Herald

Get the news delivered straight to your inbox

Receive the day’s news, sport and entertainment in our daily email newsletter

SIGN UP NOW

© Copyright 2017, NZME. Publishing Limited

Assembled by: (static) on production apcf03 at 26 May 2017 06:41:07 Processing Time: 573ms