Just as Las Vegas Sands has brought France’s Eiffel tower to Macau, it now plans on building a London-themed attraction in Macau as well.
Las Vegas Sands, owned by U.S. billionaire Sheldon Adelson, stated that it plans on spending $1.1 billion on new projects, which will include a London-themed attraction, in the world’s largest gambling hub – Macau.
Sands, which already owns five properties in the Chinese territory through its Sands China subsidiary, said it would renovate and re-brand Sands Cotai Central as The Londoner Macao by 2020.
According to analysts, Sands Cotai Central has been one of the company’s weakest properties. Its weakness stems from the lack of appeal from tourists and its lack of character in comparison to its Parisian property that features a replica Eiffel Tower.
The timing of Cotai’s renovation comes at a time when casino licenses will begin to expire from 2020 as authorities are pushing to diversify industries in Macau, with gambling accounting for more than 80% of government revenues.
With the Parisian’s completion in 2016, Sands has now turned to revamping existing properties, add new rooms and suites to its St Regis and Four Seasons properties as well as renovate VIP areas at the Venetian and Plaza Macau.
Sands’ earnings report has been in line with analyst expectations. On Wednesday, it disclosed a net revenue of $3.2 billion for the third quarter.
“While we have invested over $13 billion in Macao since 2002… we see tremendous future opportunity in the Macao market as it continues to grow and evolve,” said Adelson, the first mover into Macau’s Cotai strip, in a statement.
What was earlier a dusty stretch of reclaimed land, now teems with glitz and cavernous gambling halls.
“In the long run should be value additive to the company. However dividend growth may be limited over next few years as FCF (free cash flow) is redirected to capital expenditure,” said Vitaly Umansky, an analyst at Sanford C. Bernstein in Hong Kong.