Hong Kong real estate giant Far East Consortium (FEC) has described the opportunity to introduce its sizeable VIP customer base to its global gaming operations as being behind the decision to invest in gaming operations in Australia and Europe.
Outlining the company’s future plans in its 2018 Annual Report, Chairman and CEO David Chiu said FEC would utilize cross-marketing opportunities to drive traffic to its growing network of casinos and related properties.
FEC is building the US$3.2 billion Queen’s Wharf integrated resort development in Brisbane in partnership Australian IR operator Star Entertainment Group and Hong Kong jewelry firm Chow Tai Fook and in March became a 4.9% equity partner in Star. It also purchased European casino operator Trans World Corp (TWOC) for US$42 million around the same time.
“We are convinced that the hotel and entertainment part of our gaming and entertainment business will benefit from the huge growth of middle-class in the ‘Asian Wallet’,” Chiu said.
“The group acquired approximately 5% equity interest in The Star for its stable dividend income and cash flow, enterprising management and the potential increase in the group’s land bank in Australia.
“From a long-term view, we hope that such development in gaming and entertainment operations will produce synergies through cross-marketing, VIP Member Loyalty Program and joint promotion.
“Equipped with such synergetic drive, we seek to bring our loyal VIPs to different cities worldwide for accessing our tourism, hotel and entertainment services as well as property investment.”
Expanding on the group’s “Asian Wallet” strategy, Managing Director Cheong Thard Hoong said FEC would “target middle class customers in Asia for tourism and other hospitality offerings as well as their growing appetite for property investment internationally.
“We expect that the acquisition of TWOC and our approximately 5% equity stake in The Star, will start to contribute to the group’s results from FY2019 onwards,” he said.
“We intend to use the TWOC platform to grow our casino gaming business leveraging on the connections we have in Asia. In addition to contribution from existing operations, in the long run, we see synergies resulting from cross selling and joint developments which will drive higher profitability.
“Longer term, when the Queen’s Wharf Brisbane development, which is currently under construction, commences operation, this segment is expected to contribute significantly to the overall profitability of the group.”
FEC is expected to raise its stake in Star Entertainment Group in the coming months to around 9.9% pending Australian regulatory approval. Aside from the Queen’s Wharf Development, Star holds monopolies in two of Australia’s leading tourism destinations via The Star Sydney and The Star Gold Coast.
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