Australia’s Star Entertainment Group Limited has entered into a sale and leaseback transaction with investment and funds management firm Charter Hall for the property related to its Treasury hotel and casino in Brisbane.

Under the terms of the deal, Star will sell both the Treasury Casino and Treasury Hotel buildings, as well as the car park, for AU$248 million. Both Treasury Hotel and the car park transactions will settle early, after which time Star will lease them back for an initial term of 30 years with two additional 15-year options. The lease terms imply an initial cap rate of 4.7% and include fixed annual rent increases over the term of the lease, Star said.

Star will continue to operate Treasury Casino until it settles upon the opening of its AU$3.6 billion Queen’s Wharf Brisbane development in 2023, after which time casino operations will move to the new property.

A joint venture between Star and its two Hong Kong-based partners, Chow Tai Fook Enterprises and Far East Consortium, Queen’s Wharf Brisbane is seen as transformative for Brisbane’s CBD with four world-class hotels, 50 restaurants, cafes and bars, 12 football fields of public space, and up to 2,000 residential apartments, plus a substantial casino with 2,500 slot machines and gaming tables numbering in the hundreds.

The Treasury arrangement sees Star retains its existing interest in the former State Library building, which is not part of the transaction, with the company still exploring future uses and ownership models for the site, described as the smallest of the four Treasury assets.

Star had previously hinted at such potential sale and leaseback opportunities when it submitted a proposal to merge with the other major player in Australia’s casino market, Crown Resorts, in May, and recently initiated a plan to sell and leaseback a 49% stake in The Star Sydney.