GGRAsia – Osaka IR launch delay to 2030, initial cost up by US$1.3bln

Osaka IR launch delay to 2030, initial cost up by US$1.3bln

Sep 05, 2023 Newsdesk Japan, Latest News, Top of the deck

The authorities in the Japanese metropolis of Osaka have confirmed that the planned timetable for opening an integrated resort (IR) with casino (pictured in an artist’s rendering) has been shifted from “autumn-winter 2029” to “autumn 2030” at the earliest, and that the initial investment cost will rise by JPY190 billion (US$1.29 billion).

The information was collated by GGRAsia’s Japan correspondent, based on a Tuesday update by the Osaka authorities.

The qualifying statement of autumn 2030 being the earliest date for opening was in the context of ongoing discussions regarding the land on Yumeshima, an artificial island where the resort is to be built.

Completion of construction has also been put forward to “summer 2030″ from “summer-autumn 2029″, according to a revised draft plan.

An initial investment of JPY1.08 trillion was mentioned at the time a bid was accepted from Osaka’s private-sector partners on the scheme. The new initial investment will be JPY1.27 trillion, 17.6 percent higher than the previous estimate.

In terms of the funding for the resort, the new draft plan says the loan portion will remain at JPY550 billion. The equity part will rise from JPY530 billion to about JPY720 billion. The increase will be born by the two main partners, who will up their share of investment in the consortium from 40 percent each to 42.5 percent each. The minority investors in the consortium will collectively see their interest reduced to 15 percent, from 20 percent.

The revised draft plan still needs to be approved by Japan’s national government.

The update was given following a Tuesday meeting of a body known as the “Second Capital Promotion Bureau”, established jointly by Osaka prefecture and Osaka city, providing an update of agreements made between the Osaka side and their private-sector partners for an IR.

The private-sector partners are MGM Resorts International – also the parent of Macau casino operator MGM China Holdings Ltd – and Japan’s Orix Corp, as well as smaller investors, in a consortium for development of MGM Osaka.

MGM Resorts has previously described the venture as a US$10-billion project.

Hirofumi Yoshimura, governor of Osaka prefecture, said in mid-July it would be difficult to open the IR in a 2029 time frame previously mentioned. He said one factor was the time it had taken the national government to approve Osaka’s plans.

The IR District Development Plan for Osaka was approved in principle on April 14 by the national authorities, having been submitted to them in April 2022.

(Updated, 3.20pm Sept 5)