Sydney Set to Gain Three New Theatres as Star Entertainment Sells Off Assets

Sydney is poised to develop its own West End-style theatre precinct after The Star Entertainment Group sold key assets at its Pyrmont complex to Foundation Theatres in a deal worth AUD $60 million. The transaction involves The Star Event Centre, the former Marquee nightclub, and an unused “cold shell” space—all of which will be transformed into three new performance venues.

Foundation Theatres, already responsible for operating the Sydney Lyric and the boutique Foundry Theatre within The Star’s footprint, intends to open the additional stages from late this year. This expansion will deliver five theatres in total, potentially positioning Sydney as the new epicentre of Australian theatre—surpassing Melbourne for major live productions.

According to Foundation Theatres, official approvals have been granted for a 1,550-seat Broadway-style auditorium as part of remodeling the existing Event Centre. The group plans to repurpose the former Marquee nightclub, closed since 2022, into a live entertainment space that can accommodate up to 1,000 people. Another 550-seat venue will be devoted to cabaret, comedy, and other intimate shows.

In a statement, the theatre operator noted that the new facilities would be “a great addition to the live performance ecosystem of Sydney,” and that more than half a million people visited the Sydney Lyric alone in 2024. With the expanded complex, over one million annual visitors are expected to attend shows at The Star precinct.

Star’s Financial Struggles

The sale comes at a critical juncture for The Star Entertainment Group, which is seeking to stave off financial collapse. In the final three months of last year, the company reported burning through more than AUD $100 million and recently warned it may not have sufficient funds to continue as a going concern.

In an effort to raise capital, The Star has already offloaded the leasehold of the heritage-listed Treasury Casino building in Brisbane to Griffith University for AUD $67.5 million. Its hotel properties in Sydney and on the Gold Coast have also been flagged as potential sales. Under the terms of the latest transaction, Foundation Theatres will place the AUD $60 million purchase price into escrow, with the funds held in a special account tied to The Star’s debt facility.

Meanwhile, The Star has already utilized the entire AUD $100 million bridging loan extended by a banking consortium last year. The company faces rigorous conditions to draw down an additional AUD $100 million and continues to grapple with approximately AUD $1.6 billion in debt for the new Queen’s Wharf development in Brisbane, which must be refinanced by December 2025.

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Regulatory Backdrop

Financial woes are compounded by significant regulatory challenges. Public inquiries have found The Star unsuitable to hold a casino licence due to alleged lapses that enabled possible money laundering and other criminal activities. While the NSW Independent Casino Commission (NICC) stopped short of cancelling the licence, it issued a AUD $15 million fine last October and appointed a government manager to oversee operations in New South Wales and Queensland.

The Star has also allocated AUD $150 million to cover potential fines stemming from separate investigations by the federal money laundering regulator, Austrac, with some analysts predicting penalties could exceed AUD $300 million.

These ongoing issues have led to a sharp decline in The Star’s share price—down nearly 40 percent so far this year. However, news of the theatre precinct deal provided a modest boost, with shares opening 8.7 percent higher at 13 cents on Wednesday.

Despite the financial and regulatory pressures, local business leaders and theatre enthusiasts alike remain optimistic about the city’s emerging cultural hub. If the construction of new venues proceeds on schedule, Sydney stands to elevate its profile as a global destination for live theatre and performing arts.

AussieTheatre has reached out to both ASIC and The Star Entertainment Group for comment and will provide updates as more information becomes available.