Mystery buyer flags high hopes for closed Melbourne Star Observation Wheel

It has not turned for almost two years - but there are hopes the Melbourne Observation Wheel could open again with a potential buyer doing “due diligence’’ on a sale.

The Melbourne Observation Wheel has not lit up the sky since September 2021 but could turn again.

A mystery buyer is circling a sale of the Melbourne Star Observation Wheel – fuelling hopes one of the city’s biggest white elephants can finally get a new lease on life.

The Herald Sun can reveal administrators are in advanced stages of selling the troubled Docklands tourist attraction that stopped turning almost two years ago.

Administrator Grant Thornton confirmed a potential deal for the 120m high wheel, opened in 2008 and closed in September 2021, were progressing pending “due diligence’’ testing of the structure.

But the administrator was tight lipped about whether the buyer wanted to get the wheel moving again in its Docklands location or tear it down and move it to a new site in Victoria, interstate or overseas.

Grant Thornton partner and financial advisory head Andrew Hewitt was also unable to say if the company looking to buy the wheel was Australian or international investor.

“We are currently working with a party in relation to the MSOW and they have commenced a due diligence process to assess the operational issues in respect of the Wheel,’’ Mr Hewitt said.

The Melbourne Star Observation Wheel opened in 2008 but closed in 2021.

“Upon completion of this they will determine whether they wish to progress to a purchase of the assets.”

The sale could be fast tracked by the threat of litigation with the Herald Sun told Docklands businesses had mounted legal cases for lost income in a precinct meant to be a tourist hotspot.

The wheel cost about $100m to build but recent efforts to sell it have failed, with a gap of up to $14 million between what the liquidators asking price and what investors were prepared to pay, sources said.

Previous prospective buyers had shown interest in restarting it, moving it to another site and taking it overseas.

Lord Mayor Sally Capp supported reactivation of the site, which is one of the first things tourists see entering the city from the airport on the Bolte Bridge.

“The City of Melbourne would readily welcome the next step for the Melbourne Star Observation Wheel site, a prime position in our valued suburb of Docklands,’’ she said.

“Since its closure in 2021, council has been on standby to support the next stage for this project or location.’’

Operating company MB Star Properties Pty Ltd placed the wheel, one of the biggest in the world, in liquidation after more than $3.9m of debt was racked up during Melbourne’s harsh Covid lockdowns.

Ms Capp said Docklands was estimated to be home to more than 22,000 people, attract 20 million visitors each year and be a workplace for 50,000 people in the next 10 years.

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