Inside Asian Gaming

5 16 chosen wisely for its first venture into Grade A residential development in Macau, picking a zone offering double the average annual growth of the local market. “While the Macau property market has been experiencing strong upward momen- tum, some areas are doing better than the others,” says Mr Ho. “In 2006, the overall market advanced 8%, whereas some areas such as Nam Van and Areia Preta moved up 16% and 26% re- spectively.” LaSalle Investment Fund has also been looking over the Chinese border at Hengqin Island, where Las Vegas Sands Corp (LVS) is planning a non-gaming resort, and nearby Zhuhai, but Mr Chiu says so far it has not identified any firm opportunities. Same story in Singapore Mr Tsang says the ‘casino effect’ has also been seen in the Singapore housing market since LVS won the tender to build an integrated ca- sino resort at Marina Bay,and a consortium led by Genting International won the rights for a second casino operation at Sentosa Island. “Ever since they [the Singapore govern- ment] announced the casino idea, the Sin- gapore market has been really boiling,” he states. Research from Colliers International in Singapore suggests growth has been mainly confined to the luxury end of the market, with values rising by an average of 35% over the course of last year. Mr Chiu says he expects to see further significant rises in luxury property values in Macau and Singapore, because the markets are likely to attract buyers from neighbour- ing countries with strong economies and sig- nificant amounts of liquidity. These investors are likely to buy in order to rent to expatriate workers and tourists brought in by the ca- sino projects. He adds the Singapore market is currently being drivenmainly by sentiment rather than fundamentals. “There is still a long way to go in terms of casinos opening there. I think it will draw at- tention fromneighbouring countries though. Singapore for example is close to growing economies such as Malaysia, and of course Macau is drawing attention from China,”says Mr Chiu. Regional demand “In Macau, aside from the local market, we see a lot of demand from South East Asia— particularly Singapore. For the Bel-Lago project we have received quite a number of enquiries from there and from Indonesia and even buyers from the United Kingdom and the United States. Japan is another Asian country widely touted as about to reform its gaming laws to allow casino resorts. Mr Chiu from LaSalle says however the size of Japan’s economy means the ‘casino effect’ is likely to be less pronounced and casino resort zones may not attract the same degree of overseas real estate investment. “Japan is really a huge country, so de- pending on where the casino is, the econom- ic effect will be very localised,”he explains. “It may for example, not really benefit our investments in Tokyo. It’s a little bit different from Macau or Singapore. “Our portfolio in Japan is very diversi- fied. It covers hotels, shopping centres and offices, though of course the hotel sector in particular benefits from tourism and leisure projects. Crunch downside A potential downside on Macau property de- velopment is rising costs linked to the labour crunch and the need to import high quality plant and operators from outside. Mr Chiu remains bullish though: “Rising cost is a fact and we are seeing this every day. But people now are appreciating this new kind of product. If you want Grade A you need the brand name machinery and the people to oper- ate it.” Around 90% of LaSalle Investment Fund’s capital is managed on behalf of institutional investors, and both Mr Chiu and Mr Tsang see the Bel-Lago project as an opportunity both to drive up Macau property standards and to showcase the investment opportunities in the territory. “Up to today most of the supply in Macau has been of medium grade. The properties have been big in area, but the quality hasn’t compared with the European market or even the Hong Kong market,” says Mr Tsang “We have high hopes that with really real- ly good product,we can achieve better finan- cial results than are currently being seen on average in the Macau property sector. At the moment in Macau, they don’t have the right product, because developers are still fighting and competing in the medium-grade sector. We haven’t seen the best until now. “If someone’s prepared like us to invest money in really Grade A product, I am sure they will find a market.” TCS JOHNHUXLEY .COM Add an extra dimension to your Sic Bo tables with a unique 55” high resolution animated playing surface, automated game results and the World’s first Super Streak side bet option. The new Super Sic Bo table from TCSJOHNHUXLEY is the most eye-catching and exciting way to play Sic Bo. 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