SJM Holdings has announced details of an agreement between its wholly-owned subsidiary and Macau casino license holder, Sociedade de Jogos de Macau, S.A. (SJM), and NYH Gesta ̃ o de Vendas a Retalho Limitada (NYH) that will see the latter open and operate Macau’s second New Yaohan department store at Cotai integrated resort Grand Lisboa Palace.
NYH Gesta ̃ o de Vendas a Retalho Limitada is a subsidiary of STDM, the 54.06% majority shareholder in SJM.
Under the terms of the agreement, NYH will be granted the right to use the new retail space for a term of 12 years and six months from the official commencement date, which SJM said was expected to take place in April 2020.
However, the Grand Opening of the shopping mall won’t take place until at least six months after the commencement date, SJM said, flagging October as the earliest possible date for retail operations to commence.
SJM also noted that while neither party is entitled to terminate the agreement within the first six year period, SJMSA held the right to do so at any time afterwards should there be a need to extend the casino space at Grand Lisboa Palace by utilizing the New Yaohan premises as extra gaming floor. NYH can terminate if sales in Year 6 are less than 150% of those in Year 1.
In a filing, SJM said, “The Grand Lisboa Palace, SJMSA’s new lifestyle-focused integrated resort in Cotai, began construction in 2014 and is nearing completion such that the application for issuance of the occupation permit can be made shortly. More than 90% of the total area will be devoted to a full range of non-gaming facilities for shopping, dining and entertainment.
“The entering into of the Right to Use a Shop Agreement is considered strategically important to the success of the Grand Lisboa Palace as (i) ‘‘New Yaohan’’, being a well-known department store brand, is expected to draw traffic to both gaming and non-gaming facilities of the Grand Lisboa Palace; and (ii) the entering into of the Right to Use a Shop Agreement will generate income for the Group from an anchor retailer, who will take up approximately one-third of the retail space of the Grand Lisboa Palace, on a long-term basis.”