CapitaLand buys 20pc of Macau Studio City

PUBLISHED : Wednesday, 10 January, 2007, 12:00am
UPDATED : Wednesday, 10 January, 2007, 12:00am

CapitaLand, the Singapore-listed property firm controlled by government investment arm Temasek Holdings, will pay between HK$658 million and HK$1.11 billion for a 20 per cent stake in the Macau Studio City casino resort.

The investment in the HK$16 billion complex being developed by a consortium led by eSun Holdings marks CapitaLand's first investment in Macau, as well as the first time a state-backed firm from Singapore has taken an equity interest in a casino project.

CapitaLand and sister company Keppel Land submitted unsuccessful bids for Singapore's first two casino licences, one of which was awarded to Las Vegas Sands Corp in May while the other went last month to a partnership between Malaysia's Genting International and Hong Kong-listed Star Cruises.

CapitaLand hoped 'to capitalise on the tremendous growth potential of Macau as it rapidly transforms itself into the 'Las Vegas of the East',' chief executive Liew Mun Leong said last night.

Macau Studio City breaks ground today on a 1.5 million square foot site at the southern end of the Cotai Strip. The project will open in two phases beginning in 2009 and initially will feature a 200,000 square foot casino, two hotels, a shopping plaza, concert arena and theatre.

After CapitaLand's purchase, eSun's stake in the project will drop to 40 per cent. The remaining 40 per cent was bought for HK$1.32 billion in April last year by a group of US investors including former Las Vegas Sands executive David Friedman and private fund management firms Silver Point Capital and Oaktree Capital Management.

CapitaLand's initial commitment of HK$658 million will rise to HK$1.11 billion, provided the Macau government approves a pending application from eSun to increase the gross floor area of Studio City to 6.6 million square feet from the previously approved 3.66 million square feet.