Casino developer and operator NagaCorp Ltd says it still plans to move ahead with construction of Naga 3, an addition to the NagaWorld gaming complex in Cambodia’s capital Phnom Penh. That is despite the project having been pushed back by four years. According to management, Naga 3 is likely to be opened in phases, with the podium forecast to be the first part to come online.
As it currently stands, Naga 3 is projected as a podium structure featuring casino space and additional non-gaming entertainment offers and three hotel towers, according to comments by NagaCorp’s management during a media briefing (pictured) held on Thursday in Hong Kong, following the firm having announced its latest interim results.
The entire Naga 3 scheme will likely be opened in phases, depending on market conditions, said NagaCorp’s executive deputy chairman and executive director, Philip Lee (pictured, second from right).
“The podium level is the main focus for us, because that’s where all the additional gaming and entertainment is. And so our focus is… to get that up and running first,” he added.
The existing Naga 3 project is to include three hotels: one JW Marriott unit, a Grand Hyatt, and the third one to be directly linked to NagaCorp, according to Mr Chow Kok Cheong, managing director of property planning and development at NagaWorld Ltd, the operating unit of the NagaWorld complex.
Referring to the planned phased opening for Naga 3, Mr Lee said: “We will go through it as and when we see how the market recovers, because now it’s still very much in the early stages of market recovery [post-Covid-19].”
He added: “In Naga 1 and 2, our hotel rooms are running at about 40 percent occupancy, compared to pre-Covid [levels] of about 80 percent to 90 percent of occupancy. So, our thinking is ‘let’s focus on getting a podium [to be launched first]‘, to supplement the hotel rooms that are available at Naga 1 and Naga 2, so that Naga 1, 2 and 3 will be a truly integrated resort, with all the entertainment and food and beverage facilities [ready], to bring in added tourism to Cambodia, and benefit our gaming and non-gaming revenue.”
The new accomodation to be made available with the Naga 3′s hotel towers will be launched according to occupancy performance at the existing NagaWorld, and market conditions, Mr Chow noted.
In 2019 – prior to the onset of the Covid-19 pandemic – Naga 3 was being described as a US$3.5-billion scheme, with half the funding to come from NagaCorp’s founder and chief executive, Chen Lip Keong.
In a June filing, NagaCorp said that it was “carefully and seriously considering options” regarding the development of Naga 3, “matching revenue generation with capex expenditure”. Such options included the possibility of resizing the Naga 3 project, it said at the time. The comments were reiterated by the company in its latest interim results.
During Thursday’s media briefing, GGRAsia asked NagaCorp’s management whether it would revise the previously-announced US$3.5-billion budget for Naga 3. Mr Lee replied that the firm was “not under any obligation to complete Naga 3 at [US$]3.5 billion.” He added that, of that amount, US$700 million were originially earmarked for the podium part of Naga 3.
NagaCorp reported a net profit of US$83.0 million for the first half of 2023, up 57.4 percent from a year ago. The group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$143.2 million, 10.1-percent higher than in the prior-year period.
Mr Lee also commented about NagaCorp’s plans for a gaming resort in the Primorye gambling zone, in the Russian Far East. In March last year, the company said it would “suspend the development” of its Primorye project, citing “uncertainties” around it. At that time, the firm did not mention either the Ukraine crisis or international sanctions on Russia, although that those things were alluded to by investment analysts.
The market potential for the Primorye project is still “very strong”, said Mr Lee on Thursday.
He added: “There are two properties [in Primorye] that are creating value.” The NagaCorp executive noted that those properties were supported by domestic gaming demand from within Russia.
The first venue to open at Primorye was Tigre de Cristal, in 2015. It is majority owned by Summit Ascent Holdings Ltd, a Hong Kong-listed firm controlled by LET Group Holdings Ltd. The Shambala casino resort, run by an entity called Shambala CJSC, was the second casino to launch in Primorye, in 2020.
“In terms of the marketability or the profitability of the project [in Primorye], we’re still very confident that it has a very strong market, but we chose to suspend the development for political reasons,” said Mr Lee.
(Updated July 20, 8:39pm)
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