Galaxy bets HK$16b on next phase on Cotai Strip
Macau casino operator Galaxy Entertainment said it plans to invest HK$16 billion in the second phase of its integrated resort Galaxy Macau.
The project on the Cotai Strip, which already houses a cluster of well-known resort brands, including the Venetian, City of Dreams and Galaxy, will comprise two new luxury hotels, including the world's largest JW Marriott with 1,300 rooms, and Ritz-Carlton's first all-suite hotel.
'The centre of gambling is moving from the Macau Peninsula to the Cotai Strip. The trend is clear,' said Teng Yee Tan, an analyst at CIMB Securities in Hong Kong.
He said the Galaxy brand had already established a clear identity, with Galaxy Macau distinguishing itself by having the world's largest rooftop wave pool.
The next phase of development would boost retail space to more than 100,000 square metres, with some 200 luxury stores. Gaming capacity would grow by about 500 tables and 1,000 slots, the company said.
Vice-chairman Francis Lui Yiu-ting said the company had not talked formally with the government on the number of gaming tables. 'But we are confident that the government will support us if we have appropriate products,' he said.
Construction work began in the first quarter of this year and is expected to be completed in mid-2015.
Galaxy planned to fund the project through cash and debt, and did not plan to issue equity, it said.
Galaxy might be the only player to open new casino resorts in 2015 in Macau. Earlier this month, Sands China opened Sands Cotai Central, a few hundred metres from Galaxy's property, and plans to open the second and third phases of the project in the second half of this year and the first quarter of next year.
Wynn Macau is in talks with the Macau government for land on the Cotai Strip, but Tan said: 'Even if they received the land permit in May or June, I think the project would open in 2016.'
Galaxy earlier forecast that Macau's gaming revenue would increase 18 to 25 per cent this year, after surging 42 per cent last year to 268 billion patacas. That compared with US$6.07 billion for Las Vegas, according to gaming authorities in Macau and Nevada.
Gaming revenue rose 27 per cent in the first quarter in Macau, the only place in China where casinos are legal.
Tan said earlier that gaming revenue this year would grow about 18 per cent.
He said year-on-year growth for next month would be about 15 per cent, boosted by the 'golden week' national holiday in the first week of May, when large numbers of mainland tourists are expected.
Galaxy, founded by Hong Kong property tycoon Lui Che Woo, opened the HK$16.5 billion, 450-table Galaxy Macau resort in May last year. The project helped more than triple its profits for 2011.
Shares of Galaxy rose 3.7 per cent to HK23.75 yesterday, outpacing the Hang Seng Index, which rose 0.8 per cent.