GGRAsia – Wynn Al Marjan project to boost RAK’s GDP growth: Fitch

Wynn Al Marjan project to boost RAK’s GDP growth: Fitch

May 23, 2024 Newsdesk Latest News, Top of the deck, World

The economic growth of Ras Al Khaimah (RAK), part of the United Arab Emirates (UAE) in the Middle East, will benefit from the development of a casino resort project (pictured in a rendering) involving global gaming operator Wynn Resorts Ltd, stated Fitch Ratings Inc in a note this week.

“In addition to providing significant short-term growth momentum, we also expect the project to serve as a catalyst to attract further investment that will help increase economic resilience over the longer term, and to speed up the income convergence with peers,” said the ratings agency, noting that this would be the Middle East’s first integrated resort with a casino.

The Wynn Al Marjan Island has been described as a US$3.9-billion venture involving local partners, in which Wynn Resorts is a 40-percent equity investor. Wynn Resorts’ local partners for Wynn Al Marjan Island are Marjan LLC, and RAK Hospitality Holding LLC.

Craig Billings, group chief executive of Wynn Resorts, said recently that the group’s capital contribution to the UAE project would be around “US$900 million”. The project was as on track to “open in early 2027,” the company confirmed earlier this month.

According to the institution, Ras Al Khaimah should see “robust” medium-term economic growth in 2024 and 2025, at 6.2 percent and 5.0 percent respectively. That is supported by the development of the casino resort project, and also the investment interests in the master plans announced for Ras Al Khaimah’s RAK Central and Beach District.

The cost of the Wynn Al Marjan Island integrated resort, at US$3.9 billion, represents circa 32.0 percent of Ras Al Khaimah’s gross domestic product (GDP) in 2022, noted Fitch.

Facilities at Wynn Al Marjan Island are due to include a hotel with 1,542 rooms, including 22 private villas on a marina adjacent to the resort. The property will also feature a 7,500-square-metre [80,729-sq-feet] events centre, a 15,000-sq-metre retail venue, 22 restaurants and bars, and a theatre, according to Wynn Resorts.

The rating agency estimates that the construction phase “will boost real GDP growth by 1 percentage point in 2023, 2 percentage points in 2024 and 2 percentage points in 2025,” above its estimate for “UAE’s non-oil real GDP growth, with which our forecasts for Ras Al Khaimah is usually aligned,” it said.

Fitch Ratings said in its note that it had upgraded Ras Al Khaimah’s long-term foreign-currency issuer default rating to “A+” from “A”, with a “stable” outlook.

The rating upgrade reflected Fitch Ratings’ expectation of “improved credit metrics” for Ras Al Khaimah, driven by its medium-term economic growth forecasts, and the city’s “record of resilience to external shocks”, as well as its prospects of “stronger fiscal revenue and higher buffers”.