SJM Gets Final Land Approval for First Cotai Casino
SJM Holdings Ltd. (880), Asia’s biggest casino company by revenue, received final government approval to develop its first casino resort in Macau’s Cotai area, the Asian equivalent of the Las Vegas strip.
The casino company got official approval for a resort on the 70,468-square-meter site, according to a gazette published by the Macau government today. It has agreed to pay the government 2.15 billion patacas ($269 million).
SJM’s shares rose as much as 3.5 percent to HK$22.20 in Hong Kong trading today, headed for the highest close since its 2008 initial public offering. The approval allows it to join competitors including Sands China Ltd. (1928) and Galaxy Entertainment Group Ltd. (27) in expanding on Cotai, an increasingly popular part of the world’s largest gambling hub.
SJM, which currently runs 20 out of 35 casinos in Macau and has none on the Cotai strip, first won preliminary approval for the land grant in October. It has said it plans to develop as much as 521,435 square meters of total floor area on the site, including a five-star hotel and a casino resort. Macau is granting on the land on a renewable 25-year lease, according to today’s gazette.
“SJM is now formally entitled to develop that land,” Grant Govertsen, a Macau-based analyst at Union Gaming Group LLC said by phone, referring to today’s gazette announcement. “Its next step is getting the construction approval.”
SJM traded at HK$22 at 10:33 a.m in Hong Kong trading today. The benchmark Hang Seng index rose 0.5 percent.
SJM is the last company among Macau’s six casino operators to receive an approval to develop a casino resort in the Cotai area. MGM China (2282)’s $2.6 billion Cotai resort broke ground in February and is set to open by mid-2016.
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