Packer's Crown Widens Hunt for Buyers With Tower Mostly Unsold

(Bloomberg) -- Crown Resorts Ltd. is widening its hunt for buyers of luxury apartments at its Sydney casino development, where about three-quarters of the tower and its A$100 million ($74 million) penthouse are yet to be sold.

The 82 residences, sitting above a six-star hotel and casino, are a key feature of the waterfront resort. The Australian gambling company, controlled by billionaire James Packer, is banking on the property sales to offset some of the A$2.2 billion cost of the project.

More than six months of marketing found mostly Australian buyers for a little over a quarter of the apartments. Now Crown’s sales push is spreading to the U.K., U.S., Hong Kong, Singapore, Malaysia and Indonesia, said Todd Nisbet, Crown’s executive vice president of strategy and development. Prices start at A$9.5 million for a two-bedroom apartment.

Crown needs demand for the upscale apartments to defy the broader Australian property market, where house prices fell for a ninth straight month in June. Nisbet said his typical ultra-rich buyer, already with two or more properties, is undeterred by more rigorous lending standards in Australia or capital controls in China.

Cash Deposits

“At our price point, most of these people have investments in multiple places,” Nisbet said in an interview at a mock-up apartment overlooking the resort’s construction site. “They’re paying us cash for their deposits and we haven’t had anybody say, ‘we can’t afford it.”’

Nisbet said sales are ahead of Crown’s expectations. The development is due to be completed in 2021.

Still, Crown is broadening its campaign as a global trade war threatens economic growth and concerns linger about a slowdown in China. It’s also unlikely Crown will offload all the apartments before the tower is completed. Some potential buyers, especially those interested in the 850 square-meter penthouse, will first want to see the finished product, he said.

Most apartments will have views of the Opera House and the Sydney Harbour Bridge.

Nisbet played down the gaming component of the resort, which will compete with casino operator Star Entertainment Group Ltd. The conviction of Crown employees in China in 2017 for illegally promoting gambling has raised concern about the company’s ability to attract wealthy players from the mainland to Sydney.

“We don’t see this as a casino-oriented product,” he said. “We think of this as a luxury residential product. You wouldn’t even know there’s a casino in the building unless you know where to go and you’re a member of it.”

©2018 Bloomberg L.P.

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