Las Vegas Sands Asks for More Land in Singapore
Las Vegas Sands Corp., the world’s biggest casino operator by market value, is asking Singapore for more land because it’s running out of space at its $6 billion resort in the city-state.
“Within 12 to 18 months, we will be rationing space,” billionaire Chief Executive Officer Sheldon Adelson said at a briefing in Singapore today. “We need all the land we can get. We are burdened by our own success.”
Las Vegas Sands, which tripled in market value in 2010 as it opened the Singapore casino in April, expects a return on its investment from the Singapore casino resort in four years, Adelson said. The Marina Bay Sands has thus far drawn 11 million visitors and filled 87 percent of its more than 2,500 hotel rooms this month.
“This is their most profitable operation worldwide,” Carey Wong, Senior Investment Analyst at OCBC Investment Research Pte, said in a phone interview today. “A lot of people probably underestimated the extent of the wealth circulating in Asia. This could be one reason why they are so keen to expand.”
Las Vegas Sands rose 0.3 percent to close at $48.27 in New York trading yesterday and has gained 5 percent this year.
Las Vegas Sands wants “whatever amount of land the government will put up for auction,” Adelson said. “How much more land? How about 10 times?”
Asian demand for casinos will be “unending” and Marina Bay Sands needs more space to hold meetings and conventions, said the casino magnate, who also has gambling properties in Macau.
Adelson also said he’s “seriously looking” at a mini Las Vegas Strip in Europe and that he’s building a team for the project that will cost 10 billion euros to 15 billion euros and create 180,000 jobs, with Barcelona and Madrid as the most likely locations.
The company isn’t seeking more casino space in Singapore, Adelson said. While it should have enough room for conventions for the next two to three years, he wants to double the space for such facilities, he said.
“The Singapore integrated resort market is still in its infancy and there is significant potential to grow,” said Aaron Fischer, a Hong Kong-based analyst at CLSA Ltd. “We said last year Sheldon Adelson didn’t have enough space for hotels or other non-gaming.”
Marina Bay Sands’ casino, some convention facilities, shops and restaurants were opened in late April. A second phase, which included a sky park and 160 meter-long swimming pool atop three 55-floor hotel towers, opened in June, and today marks the opening of the final structure, the lotus flower-shaped ArtScience Museum.
It has 120,000 square meters (1.3 million square feet) of meeting and exhibition space and Southeast Asia’s biggest ballroom, according to its website.
Singapore’s other casino, Genting Singapore Plc’s $4.7 billion Resorts World Sentosa, which includes Southeast Asia’s only Universal Studios theme park, opened in February last year. Genting Singapore slipped 1 percent to close at S$2.02 in Singapore trading, trimming gains over the past year to 98 percent.
The Singapore Tourism Board predicts the two resorts will help the island nation lure 17 million visitors and triple annual tourism revenue to S$30 billion ($23.5 billion) by 2015. Tourism spending jumped 49 percent to S$18.8 billion last year as visitor arrivals jumped 20 percent to a record 11.6 million.
“There’s going to be a lot going on as Singapore continues to increase those tourism numbers,” Adelson said. “Demand is going to be higher than supply very shortly as the entire hospitality industry here is running at over 80 percent occupancy. There is an awful lot of times when there are no places to stay.”
The casinos helped Singapore’s economy expand 14.5 percent in 2010, which probably made the city of 5 million people the fastest growing in the world after Qatar, according to International Monetary Fund estimates.
The ArtScience Museum, designed by Moshe Safdie, has three floors of gallery space and marquee exhibitions curated by various museums. Safdie also designed the Marina Bay Sands resort, Habitat 67 in Montreal, Quebec, and terminal three of Ben Gurion International Airport in Israel.
The Walt Disney Co. musical “The Lion King,” previously delayed because the theater wasn’t ready, will start showing next month, Adelson said.
Singapore’s two casinos opened last year after a four- decade ban was lifted to help boost tourism revenue and shed what Prime Minister Lee Hsien Loong called an “unexciting image.”
They contributed S$420 million in net revenue to the city- state during the April to November 2010 period, according to government and PricewaterhouseCoopers LLP forecasts. Both casinos may have a combined $5.5 billion this year, according to the estimates. The government imposes a 5 percent tax on revenue from “premium players” and 15 percent on mass-market gamblers.
“Singapore for us has opened up a new market for Southeast Asia that most people did not understand existed,” Adelson said. “There were a lot of skeptical analysts and money managers that said ‘Are you sure there is enough demand to meet two casinos?’ The answer is, for the youngest person in this audience, for the rest of their life, there will never be a saturation of the potential market in this part of the world.”
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