SJM Raises Budget for New Casino Resort in Macau’s CotaiVinicy Chan
SJM Holdings Ltd., Asia’s biggest casino operator, said it will spend HK$5 billion ($645 million) more than planned on its newest Macau resort due to rising labor and construction costs.
The project in Macau’s increasingly popular Cotai area is expected to cost HK$25 billion to construct, higher than an earlier estimate of HK$20 billion, Chief Executive Officer Ambrose So said at a media briefing in the world’s gambling hub yesterday.
SJM, founded by gambling mogul Stanley Ho, pushes to catch up with rivals including Sands China Ltd. and Galaxy Entertainment Group Ltd. in expanding on Cotai, the Asian equivalent of the Las Vegas Strip. While SJM runs 20 out of the 35 casinos in Macau, it has none in Cotai.
The new casino resort will include a luxury hotel that SJM is developing with Italian fashion house Gianni Versace SpA. The five-star Palazzo Versace hotel will have as many as 270 rooms and is slated to open in 2017. Construction will begin in the next few months.
The Hong Kong-listed casino company is also considering buying land in Hengqin, an island next to Macau, So said yesterday. Shun Tak Holdings Ltd., the property company also founded by Ho, earlier this year said it won a bid for a site in Hengqin and plans to build a hotel-to-office complex there. China designated Hengqin as a tourism, business and cultural zone, and a resort is under construction in the area, Shun Tak said then.
In May, SJM became the last of Macau’s six casino operators to receive government approval to develop a Cotai resort. The project, which will be built on a 70,500-square-meter site, will feature up to 700 gambling tables and 1,000 slot machines.
Other casino operators are also expanding on Cotai. MGM China’s $2.6 billion Cotai resort broke ground in February and is set to open by mid-2016. Sands is investing in building its fifth resort, to be called the Parisian, in Macau.