MGM China confirms intention to invest in Hengqin
MGM China Holdings Ltd, the Macau unit of MGM Resorts International, said it wants to invest in neighbouring Hengqin Island on its own, not via a partnership. The casino operator said mainland China authorities are considering whether to give permission for the firm to invest in a non-gaming project in Hengqin.
“At this stage the company will be doing it on its own,” a spokeswoman for MGM China told GGRAsia.
Pansy Ho Chiu King, who has an approximately 27 percent interest in MGM China, has already acquired a site on Hengqin via conglomerate Shun Tak Holdings Ltd. The firm, headed by Ms Ho, said in July 2013 it would pay RMB721 million (US$116 million) for a Hengqin land located near the Lotus Bridge crossing point to Macau.
Shun Tak plans to develop an integrated project featuring offices, hotel, commercial areas and serviced apartments.
MGM Resorts has a joint venture in mainland China with state-owned Diaoyutai State Guesthouse of China to develop hotels and resort projects. Diaoyutai MGM Hospitality Ltd already runs three hotels and plans to open seven more until 2019. The closest project to Macau is in Shenzhen and will only open in 2019.
On Sunday, Chinese-language newspaper Macao Daily News reported that MGM China had already chosen the plot it plans to develop on Hengqin.
Asked about those plans, MGM China’s spokeswoman told us that further information would only be provided later.
A report in October from Daiwa Securities Group Inc suggested “some of the Macau gaming operators are planning to build dormitories in Hengqin to house workers”.
If MGM China’s application is approved, the firm would be the second Macau casino operator with a confirmed investment in the neighbouring island.
In March, Galaxy Entertainment Group Ltd announced it had signed a framework agreement to move forward with a RMB10 billion non-gaming resort on a 2.7 square kilometres (1.0 sq. miles) parcel of land on Hengqin. The company expects to break ground next year, Galaxy’s deputy chairman Francis Lui Yiu Tung told Macao Daily News in an interview last week.
The border crossing between Macau and mainland China’s Hengqin Island started operating round-the-clock on Thursday, a move that is seen as beneficial for Macau’s tourism and gaming markets and that could drive more Macau companies to invest across the border.
Analysts at UBS Securities Asia Ltd said last month the 24-hour crossing at Hengqin would “benefit tourists’ flow into the Cotai resorts area [and] ensure the growing hotel inventory in Hengqin can be more relevant to resorts in Macau”.
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