Galaxy set for a big Macao bash
Updated: 2015-01-24 06:35
By Felix Gao in Hong Kong(HK Edition)
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Macao's gaming industry needs to revamp its business model as the mainland anti-graft probe marches on this year. Lam Yik-Fei / Bloomberg |
Gaming group to open new projects at Cotai in May despite sluggish climate
Macao-based gaming operator Galaxy Entertainment Group Ltd said on Friday its two new projects on the Cotai Strip will open in May this year despite the current relatively sluggish growth in the gaming industry.
Shares of Galaxy Entertainment rose by 1.5 percent to close at HK$39.5 in Hong Kong on Friday, while the benchmark Hang Seng Index gained 1.3 percent.
The two projects - the second phase of casino resort Galaxy Macau and Broadway at Galaxy Macau - together would cost HK$43 billion as part of the group's planned HK$100-billion commitment to expand on the Cotai Strip.
Galaxy is still in discussion with the Macao government on the allocation of gaming tables and slot machines. The two new projects will also feature a slew of non-gaming elements, including five-star hotels, restaurants, retail shops and multi-purpose arena for shows and exhibitions.
"Together, these will add a further 550,000 square meters to our existing developments at Cotai, which will increase our footprint to more than 1.1 million square meters of spectacular attractions," said Francis Lui Yiu-tung, vice-chairman of Galaxy Entertainment.
Galaxy Entertainment will hire more than 8,000 new employees who will join the group's current 16,000 employees this year.
The group will invest at least HK$55 billion in the third and fourth phases of Galaxy Macau to introduce more entertainment and cultural attractions. "The current message from the central government and the Macao government is to develop other business alongside gaming. We have the largest land bank and it's to our advantage," Lui said.
Galaxy Entertainment, controlled by Hong Kong billionaire Lui Che-woo, has the largest plot of land on the Cotai Strip.
Macao was ranked by the Brookings Institute and JPMorgan Chase as the top economically performing city in the world for 2014.
But the city's gaming industry took a hit in the second half of 2014, with gaming revenues falling by 2.6 percent year-on-year to $44 billion in 2014 - the only decline recorded since annual figures were first made public in 2002. In December last year, Macao's gambling revenue plunged a record 30.5 percent year-on-year, hitting the lowest point since 2011.
"The whole (gaming) industry is now in consolidation," said Francis Kwok Sze-chi, marketing director at Bright Smart Securities.
But Kwok said he is upbeat with Macao's economic development in the medium and long term. "When the economic circle starts to rise, Galaxy's new projects should bring ideal returns in the long term," he said.
felix@chinadailyhk.com
(HK Edition 01/24/2015 page6)