Melco Resorts Parent Investing in $1.5B Mixed-Use Development and Theme Park
Posted on: June 24, 2021, 10:31h.
Last updated on: June 24, 2021, 01:30h.
The parent company of Melco Resorts, Melco International Development Limited, is taking a minority role in mixed-use development and theme park in Zhongshan. That could cost as much as 10 billion yuan (US$1.55 billion).
The project site in Zhongshan neighbors Macau, where the company’s subsidiary Melco Resorts owns and operates its multibillion-dollar casino resorts.
In a filing with the Hong Kong Stock Exchange, Melco International announced it is initially investing $285.6 million into the undertaking. The remaining capital is coming from Agile Group Holdings, a publicly traded real estate development firm.
The securities filing announced the acquisition of a piece of vacant property measuring some 125 acres for $515 million.
Melco Resorts is one of six licensed commercial casino operators in Macau. Melco International controls 55.8 percent of the casino resort firm.
In Macau, Melco Resorts owns and operates Studio City, a Hollywood-themed integrated resort, and City of Dreams, an urban-themed complex. Both properties are located on the Cotai Strip.
Non-gaming attractions at the resorts include a waterpark, the world’s highest “figure-8 Ferris wheel,” a contemporary art museum, and a 17,000-square-foot “Kid’s City.”
Macau officials, at the direction of People’s Republic officials in Beijing, have been urging its casinos to diversify into non-gaming businesses. But there is little vacant development room remaining in Macau and Cotai, leading some to look to the neighboring province of Guangdong.
Macau International says the unnamed development in Zhongshan will “include residential, commercial, recreational, and entertainment elements, featuring ancillary facilities such as hotels, parks, and green areas.”
With the land acquired, Melco and Agile say the complex is targeting completion in 2025.
Analysts Approve Strategy
Melco Resorts, like each of the five other casino giants in Macau, the world’s richest gaming hub, suffered greatly in 2020. The firm reported a loss of approximately $1.6 billion last year.
Gaming analysts like the idea of Melco Resorts’ parent investing in non-gaming amenities.
While the project will not open before 2025, once in place, it can provide a co-marketing opportunity for Melco Resorts’ casino properties in Macau,” a note from Sanford Bernstein read.
The Bernstein analysts also believe the venture will only better improve Melco Resorts’ odds of being issued a new gaming license by Macau. All six casino operators will see the gaming privileges expire in June of 2022.
The Zhongshan project is additionally a sound business gamble, adds another expert.
“It’s a good tactic,” said Alva To, vice president of Greater China, a property consulting firm. “The proposed project will supplement Melco’s entertainment business in Macau.”
Related News Articles
Related News Articles
- July 12, 2021 — 13 Comments—
- July 15, 2021 — 4 Comments—
- July 24, 2021 — 4 Comments—