Inside Asian Gaming

May 2008 | INSIDE ASIAN GAMING 29 Feature T he towering frame of the 56-storey Le Royal Arc dwarfs the big-name casino hotels that surround it, including Galaxy’s flagship StarWorld, Wynn Macau, and MGM Grand Macau. Le Royal Arc is set for a soft opening by the end of this year and there will probably be at least a two-year gap before the next casino property—Melco PBL Entertainment’s ultra-luxe Trinity project— arrives on the increasingly crowded Macau Peninsula casino scene. Le Royal Arc is unique in stacking a residential block atop a casino hotel. “Even MGM’s condos will not be in the same building [as the hotel and casino], but to the side,” points out Paul Tso, CEO of Arc of Triumph Hotel Management Company Ltd—the development was originally to be called Arc of Triumph, in recognition of the famous monument in Paris (honouring those who fought for France, particularly during the Napoleonic Wars) that inspired the distinctive arches that line the podium façade. Presumably Le Royal Arc was less of a mouthful. While the Arc in Paris bears no load, Le Royal Arc’s podium supports a hotel and apartment tower, in what turned out to be a canny configuration. Presales of the apartments, which will rise from the 22nd to 56th floors of the development, began in March 2007. Within five months, all units were sold. Although Inside Asian Gaming did not discuss the specifics of the proceeds from the apartment sales, the units were consistently among the highest priced residential property transactions in Macau last year. The sales would have covered at least a big chunk of the HK$11 billion (US$1.4 billion) paid for the land and HK$4.8 billion in estimated development costs. The sale of the apartment component of Le Royal Arc is another example of the growing trend among casino developers to use “monetisation” to fund their properties, as discussed in “Capital Ideas” in the October 2007 issue of Inside Asian Gaming . Safe at Heights The presale of lofty residences at Le Royal Arc has made the swanky casino hotel they are perched upon a relatively risk-free investment For example, the sale of the mall space at the recently opened Las Vegas Sands Corp (LVS) property the Palazzo covered 47% of the combined US$3.3 billion cost of The Venetian Las Vegas and The Palazzo. After all, not every casino developer can count on the luck of Steve Wynn, who made a cool US$900 million by hawking a spare Macau casino sub-concession to Melco PBL, covering three quarters of the cost of the first phase of Wynn Macau. Not that the three cash-rich investors in Le Royal Arc needed creative ways to fund their project anyway. Angela Leung, a Macau legislator and the fourth wife of casino mogul Stanley Ho, holds a 45% stake. Another 45% is heldbyHongKongbillionaire Cheng Yu Tung, who heads the New World Development conglomerate, which has interests in property, infrastructure and