Pagcor’s vision for a multi-billion dollar entertainment centre in Manila Bay is finally on the way to being realizedTuesday, 01 March 2011
Shares of the two Philippines-listed property developers involved in the Belle Grande Manila Bay casino resort project have been on a tear, suggesting investors are confident the country’s biggest gaming project is well on its way to opening on or near schedule at the end of this year.
The property’s two leisure-focused developers, Leisure & Resorts World Corp (LRWC) and Belle Corp, have committed to ultimately invest a total of US$1 billion in the project over a 25-year period, with the first phase opening expected to cost around US$350 million.
Belle Grande Manila Bay is expected to be almost double the size of the successful Genting-operated Resorts World Manila, which had its soft launch in August 2009 and is located in Newport City, adjacent to the Ninoy Aquino International Airport (NAIA) Terminal 3.
Belle Grande will open at the end of this year (or possibly early next year if there are delays) with a casino and fewer than one hundred hotel rooms. Over the next three years, the gaming space will gradually be expanded to 15,000 or even 20,000 square meters with a total of 1,600 slot machines and 300-320 tables, while the number of hotel rooms will increase to 1,500.
Macau-based gaming consultancy firm Asia Pacific Gaming (APG) has been contracted to provide pre-opening consultancy services, and could also be retained to help run the casino following its opening. APG has extensive experience managing casinos and hotels in Macau and throughout the Asia Pacific region. It has been engaged by clients in South Korea, China, Macau, Philippines, Australia, New Zealand, Vanuatu, Tahiti and the US.
Onward and upward
LWRC and Belle formalised their partnership on the Belle Grand project on 14th January.
Belle Corp is controlled by Chinese Filipino businessman Henry Sy, founder of SM Prime Holdings, the largest retailer and shopping mall operator in the Philippines. Belle is one of the country’s leading developers of high-end residential and leisure properties.
Belle wholly owns Premium Leisure & Amusement Inc (PLAI). The latter was granted a provisional licence by the Philippine Amusement and Gaming Corp (Pagcor) to establish Belle Grande Manila Bay within the Bagong Nayong Pilipino Entertainment City in Parañaque City, Manila (commonly known as ‘Pagcor City’).
The agreement between Belle and LWRC gives AB Leisure Global Inc, a subsidiary of LRWC, the mandate to operate and manage the gaming component of the Belle Grande resort along Roxas Boulevard for ten years. According to Belle executive vice-president and chief finance officer Manuel Gana, LRWC will receive 15% of net income or 50% of EBITDA (earnings before interest, taxes, depreciation and amortisation), whichever is higher.
LRWC has strong connections among junket operators thanks to its ownership of First Cagayan Leisure and Resort Corporation (FCLRC), which LRWC acquired in 2005. FCLRC has a licence agreement with the Cagayan Economic Zone Authority to develop, operate and conduct internet and gaming enterprises and facilities in the Cagayan Special Economic Zone Freeport. FCLRC receives and processes applications for and issues interactive gaming licences as well as regulates and monitors all operators of Internet gaming in the zone.
Whereas Resorts World Manila caters largely to the locals market, LRWC can leverage its junket contacts to draw high rollers from other parts of Asia—particularly Greater China. Meanwhile, APG’s experience working with junkets and VIPs in Macau could also prove useful to the venture.
Optimism surrounding the potential new high roller business that could be fostered by the upcoming Belle Grande is probably a major factor behind the recent share price surges of Manila-listed LRWC and Belle. Shares of LRWC were trading at around Php1.80 six months ago, surging to a closing price of Php7.61 on 4th March. Belle’s share price surged from below Php2.50 six months ago to over Php5.0 by 4th March.
Pagcor City emerging
In addition to progress on the Belle Grande Manila Bay project, Bloomberry Resorts and Hotels Inc (BRHI) recently announced the successful first concrete pouring—signalling the start of structural works—for its own planned US$1 billion project in Pagcor City.
The development will feature a five-star, 500-room hotel covering 8.3 hectares, as well as state of the art meeting and convention and ballroom venues, restaurants, and health and fitness facilities. Despite being a newly formed company without any proven track record in the industry, Bloomberry in 2008 was among four companies awarded the right to develop parts of Pagcor City. Bloomberry (formerly Bloombury Investment Holdings Inc) was acquired by port giant International Container Terminal Services Inc (ICTSI) last year.
Pagcor City is Pagcor’s vision to develop a multi-billion dollar entertainment centre on prime reclaimed land at the southeastern portion of the Manila Bay in Parañaque City. The long-awaited development—first envisioned almost a decade ago by former Pagcor chairman Efraim C. Genuino—now appears to finally be getting off the ground. The other two companies with development rights in Pagcor City are Aruze Corp of Japan and Genting Group of Malaysia.