Iconic Melbourne Star could turn again as rescue buy is sought
By Brendan Rees
Just weeks after being destined for the scrap heap, Docklands’ much-loved Melbourne Star Observation Wheel could shine bright again with multiple parties expressing interest in buying the landmark structure.
Last month, directors of MB Star Properties, which owns the 120-metre-high wheel, said it was with “heavy heart” that the ride would permanently close after revealing the company was going into liquidation.
Citing travel restrictions and repeated lockdowns imposed by the pandemic among other challenges, the company said this had “made it impossible to sustain the business”.
However, in a sudden turn of events, the giant observation wheel could be thrown a lifeline after liquidator Grant Thornton announced it had launched a sales campaign for the iconic wheel in October.
Speaking exclusively to Docklands News, liquidator Andrew Hewitt said a “number of parties” both locally and internationally had expressed interest in the tourist attraction which has been a part of the Melbourne skyline for 15 years.
He said while it was “hard to say” whether a buyer would emerge, he had hoped offers would be made by the end of November.
“We’ve had a number of parties reach out to us independently but we’ve also identified some operators and some people who we think [the wheel] may be of interest to. We’re in the middle of that process at the moment,” he said.
We’re pleased that parties were interested in it and they’ve now got to assess the information and data and run their numbers and see if it works for them.
Asked if Grant Thornton was confident of securing a rescue buyer, Mr Hewitt said, “It’s hard to say, we’re really only asking parties at the moment to sign the confidentiality agreement which will give them access to the information brief which has got some financial data in it and the lease arrangements and the details of the assets, etc.”
Speaking to Docklands News in late October, he said it would be about “two to three weeks’ time whether we’re going to get an offer”.
While he could not say who had expressed interest in buying the wheel, he confirmed there were about 10 to 12 parties who had registered their interest, with a “mix of local and international groups,” adding “some of them are only interested in specific assets, others are interested in the whole lot”.
“We’ve also identified about another … dozen to 15 parties that run other tourism type-assets that we have connections with, and so we’ll be talking to them about the opportunity.”
Asked if he’d estimated how much the wheel could fetch, he said “No, we haven’t”.
“I don’t know what those offers will look like when they come back.”
“We’re pleased that parties were interested in it. In dealing with the asset, you’re always going to need to advertise it and we spent a couple of weeks looking at the best ways to work through it.”
Mr Hewitt said it was also too early to speculate whether the wheel would stay grounded or dismantled if it was snapped up by a buyer.
“It’s too early to say yet,” he said, adding “there are some complications … there’s a lease in place with Ashe Morgan who runs the precinct and there’s obligations around running the wheel in that lease.”
“Parties need to wrap all their minds around that and work through how they can make it work.”
The iconic attraction originally opened in 2008 under the name Southern Star at a cost of $100 million.
It operated for about five weeks before being forced to shut down 40 days later after cracks appeared in the structure’s bracing.
The wheel was out of action for almost five years after being beset by another major safety incident and problems such as not being able to operate in bad weather.
After reopening in February this year after enduring a 231-day closure following Victoria’s second wave of COVID-19, Sanoyas Group sold the Melbourne Star to Swiss-based group Robu Group for an undisclosed sum.
It’s understood the Melbourne Star has accumulated a debt in excess of $3.9 million.
Johanna Maxwell, president of Docklands Chamber of Commerce, said it was exciting that the Melbourne Star could remain in Docklands “as it’s an iconic drawcard that pulls visitors from interstate and overseas”.
“The vista of seeing the beautiful Star being lit up at night and highlighting the Docklands sky will be sorely missed should it depart permanently,” she said.
“Docklands sorely needs permanent activations like the Melbourne Star as we’re fully aware that we can no longer rely on the corporate workers to support the local businesses.”
City of Melbourne councillor and Docklands resident Jamal Hakim said he was also excited by the prospect that the Melbourne Star could shine bright again.
“The Melbourne Star has been an iconic part of the Docklands and city skyline, and it is sad to see it in darkness right now,” he said.
“I share the excitement of the Docklands community with the possibility of the wheel remaining in Docklands and shining bright in the night.”
“No matter what happens, I’m confident that Docklands will come back stronger than ever and I am excited about what is in store for the future of Docklands.”
“We have a resilient community and boast such fantastic infrastructure and links to the water and the city, a recipe for a thriving place into the future.”
Before the pandemic, the observation wheel attracted 300,000 visitors every year, nearly half of which were international and interstate tourists •