Marina Bay Sands opening delayed to 2010

LAS VEGAS Sands (LVS) will launch its Marina Bay Sands (MBS) integrated resort later than expected, with doors opening in January or February instead of at end-2009.

Early-2010 will also be when LVS is likely to re-start construction work on stalled sites in Macau, as financing is expected to be ‘settled’ by September, LVS chairman and CEO Sheldon Adelson said yesterday.

In town for a ceremony to mark the topping out of three 55-storey hotel towers at MBS, Mr Adelson said that depending on future market conditions, LVS could sell non-core assets at MBS, such as the retail mall, and use the cash to repay loans.

His comments on non-core assets were in response to questions on whether LVS might float MBS here.

There are no plans for an IPO of Singapore assets. But in Macau – where LVS owns several casino resorts, including the Venetian Macau – Mr Adelson said that LVS is ‘actively and seriously’ looking at several options to secure funding for its stalled Macau projects.

These include an IPO on the Hong Kong stock exchange of its Macau properties, which could raise US$3 billion – US$4 billion.

However, Mr Adelson said that LVS is also considering new equity partners and selling non-core assets in Macau, including retail malls and condominiums.

LVS announced late last year that it would suspend the development of Sites 5 and 6 on Macau’s Cotai Strip due to the global credit crunch, and focus on completing MBS instead.

Financing for MBS is secured.

One reason for the delay in opening MBS is said to be the complex structure of the Sands SkyPark, an aerial park that will link and crown the three hotel towers. As such, MBS is likely to open in phases, Mr Adelson said. But the phases are not likely to be far apart, he added.

Building conditions have not always been favourable, he explained.

‘We can’t control the flow of sand to make concrete. We can’t control the availability of steel. And we can’t control the availability of labour due to other projects that are in the market.’

The first attractions to open will be key revenue drivers – including the casino, which is at an advanced stage of construction.

No events are expected before April 1 for the meetings, incentives, conventions and exhibition (Mice) facilities.

However, Mr Adelson, a Mice veteran, said that MBS is negotiating about 150 Mice events contracts – most of them new to Singapore.

The hotels will also be a key component of MBS, with about 2,600 rooms and suites in total. While the number of rooms is lower than the projected 3,000 when LVS won the public tender to build the IR in 2006. Mr Adelson said that MBS will be ‘pushing business to other hotels’.

MBS has been in discussions with other hoteliers in the area, he revealed. Some had feared MBS would wage a price war to attract customers. Mr Adelson said that MBS wanted to assure other players it would not do this.

On the contrary, he said ‘we will be pushing up room rates’, because MBS will offer something unique.

Source: Business Times, 9 July 2009

60% of Sentosa IR will be ready when it opens

THE Sentosa integrated resort (IR) is all set to throw open its doors in the first quarter of next year – but visitors will not get to see the finished product.

When the resort opens, just 60 per cent of it will be ready: four hotels, the casino, the Universal Studios theme park, the theatre and the retail and dining area.

Construction of the other attractions at the 49ha resort – including the world’s largest oceanarium, a marine museum and two more hotels – will begin next year and is slated for completion by 2012.

Giving an update on the progress of the IR yesterday, Resorts World at Sentosa (RWS) executive vice-president of projects Michael Chin said some 80 per cent of construction for the first phase of the resort has been completed.

What remain to be done are exterior works and outfitting the rides for the theme park.

This should be completed by August.

After that, the resort will be testing the rides and other amenities, and getting staff up to speed on operations.

Asked about prices for the rides, the resort’s head of communications Krist Boo declined to give details. But she said that charges would be kept ‘affordable’ and that they would be competitive when compared with other theme parks.

She added that prices would be comparable and likely cheaper, dollar-for-dollar, than those at Universal Studios’ other parks in Orlando and Osaka, where day passes go for US$70 (S$100) and 6,000 yen (S$90), respectively.

Ms Boo acknowledged that there are some clouds on the horizon for the IR.

Because of the tough economic times, the resort would have to slash its visitor forecast for the first year from 15 million to 12 million, she said.

She added that it had also lowered the expected growth rate of returns on investment for the $6.59 billion project by one to two percentage points from the previously projected 15 per cent.

Spending by visitors is also expected to be less, she said, but did not elaborate.

Also, there are no takers for some of the retail space at the resort.

‘To be honest, the retail landscape is a little challenging now,’ she said.

Despite these concerns, however, the Sentosa IR is still confident of pulling in large crowds.

‘For visitors in this region, they don’t have to travel too far to enjoy a world-class attraction,’ she noted.

The resort’s main target will be visitors from countries within a seven-hour flight range of Singapore.

The exact date of the IR’s opening is expected to be firmed up by the end of the year.

Singapore’s other IR, the Marina Bay Sands, is also scheduled to open in stages, with the first opening expected at the end of this year.

Source: Straits Times, 26 June 2009

RWS structural works ending

RESORTS World at Sentosa (RWS) will complete all structural buildings by next month – 27 months after it broke ground in April, 2007.

Michael Chin, RWS executive vice-president, said yesterday that the Ministry of Manpower (MOM) has approved the company’s request to increase the quota of foreign workers on site.

MOM is also understood to have approved an increase in the foreign worker quota at Marina Bay Sands (MBS) resort.

Mr Chin said that there are about 6,500 workers on the RWS site and this will increase to 8,000-9,000. ‘All effort is being made to open as early as we can.’

The first-mover advantage will be important, especially as both RWS and MBS have casinos and are likely to open around the same time. Mr Chin would not discount opening during the lucrative Chinese New Year period in February 2010 when gambling is a popular activity.

With about 80 per cent of the main construction work already completed, all that is left is to fit out the buildings. This will include Universal Studios Singapore, four hotels and the casino. Mr Chin said that by August, most of the rides and shows at USS will be ready for testing.

RWS is confident that its resort will attract 12-13 million visitors in the first year. But spokeswoman Krist Boo said that visitor spending may be affected by the global downturn. As a result, RWS has reduced its investor rate of return (IRR) by one to 2 percentage points. Ms Boo would not reveal the IRR on its $6.6 billion investment, but it is likely to be in the region of 15 per cent. She said that more than half of RWS’s revenue is likely to be generated by the casino.

USS will also be a revenue generator, but Ms Boo said that RWS is aware that ‘USS will have to be affordable’. Entry prices will be lower than those at other Universal Studios theme parks in Japan and the US, she said. A check with the Universal Studios websites shows a one-day pass costs 5,800 yen (S$88) at Universal Studios Japan and US$75 (S$109) at Universal Studios Orlando.

Source: Business Times, 26 June 2009

Marina IR’s progress on track

CONSTRUCTION of the hotel towers at the Marina Bay Sands integrated resort (IR) is on target for completion by next month.

The three hotel towers have been built past level 50 – just five floors away from the 55-storey peak for hotel rooms, Marina Bay Sands announced in a statement yesterday.

The developer said it will hold an official topping-out ceremony early next month, presided over by Las Vegas Sands Corp chairman Sheldon Adelson.

The towers will contain around 2,600 luxury hotel rooms that are simultaneously being fitted out.

The US$5.4 billion (S$7.9 billion) IR will open by the end of the year, though likely not fully.

When completely open, it will comprise a casino, hotel rooms, convention and retail space, as well as various entertainment facilities.

Once the hotel towers reach 55 floors, Marina Bay Sands can start construction of the 56th floor and the 1ha Sands SkyPark on the 57th floor.

The SkyPark, which will stand some 200m from the ground, will have a public observation deck in the world’s largest building cantilever.

Mr George Tanasijevich, general manager and vice-president of Singapore development at Marina Bay Sands, said the topping out will be one of many significant achievements over the next few months.

‘We are putting the roof on the Expo and Convention Centre and are lining up luxury brands and cutting-edge designers for our retail stores.’

Last year, there were concerns that the project would not progress smoothly given the credit crunch. But Las Vegas Sands has assured investors that the Singapore IR is its top priority.

Source: Straits Times, 10 Jun 2009

Resorts World at Sentosa on track to open 4 hotels by 2010

SINGAPORE: Operator of Singapore’s second integrated resort, Resorts World at Sentosa, said it is on track to open four of its six hotels by the first quarter of 2010, adding some 1,350 rooms in the Republic.

Even though tourist arrivals, hotel occupancy and room rates have been falling due to the global economic slowdown, the integrated resort (IR) will be launched as scheduled.

The IR expects to fill 9,000 job vacancies by the end of this year and to bring the total number to 10,000 when its doors open.

Of these positions, 3,000 will be for the casino, 3,000 for theme park operations and about 4,000 for hotel and other entertainment facilities.

Tan Hee Teck, CEO, Resorts World at Sentosa, said: “Right now, we have 400 over employees and we will continue to grow that over the next many months. The peak of that hiring will probably come at the end of the third quarter, in the early fourth quarter of this year.

“Those people who will need training, especially in specialised equipment for the theme park and even for the casino, will be hired first. We already have an internship programme where we hire Singaporeans to be sent to Osaka in Japan and Orlando in the US for training and for familiarisation.”

The resort operator revealed this on Thursday as it unveiled plans for a Hard Rock Hotel at the IR. The US$223 million venture is one of the four hotels that will be opened at the integrated resort by next March.

The Hard Rock Hotel, comprising 10 suites and 350 deluxe rooms, will also feature one of Asia’s largest ballrooms that can seat up to 7,300 people.

Room rates at the hotel have not been fixed, but the resort operator said it would be comparable to other theme parks worldwide and on par with five-star room rates here.

While that may seem steep to some during these difficult times, its venture partner said it is confident business will do well.

Hamish Dodds, president & CEO, Hard Rock International, said: “We have a very healthy business in Japan. We’re now opening in Macau and targeting the Chinese market. Southeast Asia, with our relationship with Ong Beng Seng here in Singapore, has always been very important to us.”

Some 1,800 hotel rooms are expected to come onto the market when all six hotels at Resorts World are ready.

Source: Channel News Asia, 26 Mar 2009

IR on target for year-end opening, says Sands

THE Marina Bay Sands integrated resort (IR) will open by year-end, as scheduled, its top suits said yesterday.

It may not look like it to the casual passer-by, but despite the expanse of cranes and other construction equipment at the site, 75 per cent of the building’s structural work is already done.

Giving this assurance yesterday on a site tour for the media, top executives of the IR, several of whom flew in from Las Vegas, said that though construction has just hit the halfway point, much of the hard work has already been done.

Mr Matthew Pryor, the Venetian Macau’s senior vice-president of Asia construction, who also oversees the Singapore works, pointed out that 28 out of 55 floors of the three iconic hotel structures have been completed.

The tough part of the work on this section was securing the sloping section of the hotel towers, but now that this has been done, ’stacking floors atop each other’ will be fairly straightforward, he said.
Five to six floors of the hotels will be built monthly until July, when the blocks will be topped off.

Elsewhere, the four-storey casino building is only awaiting its roof, while there is only the fifth and final floor left to build for the meetings and convention block.

Mr Nigel Roberts, the IR’s president, said: ‘Everyone is working aggressively towards our target opening date. This is our total focus, and we are confident of delivering on all fronts.’

Mr George Tanasijevich, the general manager of Marina Bay Sands, said the apparent lack of visible construction progress on the project had led many to question if it was on schedule.

There were also worries that the impact of the global financial crisis on the books of the parent company, Las Vegas Sands, would sink the project.

But new funds were raised last year, and assurances have been given by top management that the Marina Bay Sands – which the group has described as its crowning jewel in Asia – would be completed as scheduled, even if it is at the expense of its other projects.

Mr Tanasijevich said another reason much construction was not visible was that over 40 per cent of work was done underground. There was a delay, he admitted, because an obstruction – an old sea wall – had been discovered, but this had been taken care of.

Despite their assurances that construction will be completed on time, however, what will be ready for business when the end of the year rolls around remains to be seen.

Marina Bay Sands is still in the midst of negotiating the opening schedule with the Singapore Government.

Yesterday, Mr Tanasijevich would only say that details would be announced in ‘due course’.

But he added that it will try to open sections of all areas of the IR – the retail mall, the meetings and conventions space, the casino and the hotel, so visitors can sample a little of everything.

As for the IR’s prospects in a time of falling tourist numbers – arrivals for this year are expected to drop by between 6 per cent and 11 per cent, to between 9 and 9.5 million people – Mr Roberts said he is confident it will pack in the crowds.

‘Despite the economic conditions, people will still want to come and look at this.’

Source: Straits Times – 5 Mar 2009

Marina Bay Sands to be 15% bigger

Marina Bay Sands, which is targeted to open around the end of the year, will be 15 per cent bigger in terms of gross floor area (GFA).

The four level casino area will, however, only occupy about 3 per cent of the total GFA.

The GFA for the integrated resort was initially expected to be 570,000 sq m (6.14 million sq ft). A 15 per cent increase could take it up to 655,500 sq m (7.06 million sq ft).

MBS general manager and vice-president George Tanasijevich said that since the design of MBS was first revealed, the design of the integrated resort (IR) had undergone ‘refinement and redesign’ to become both ‘bigger and better’.

This increase in size also partially accounts for the current budget for the IR which stands at US$5.4 billion, up from previous estimates of US$3.6 billion and US$4.5 billion.

About 2 per cent of additional GFA can be attributed to the $50 million that will be spent on art at MBS. This is through an Urban Redevelopment Authority art incentive scheme which allows property developers of new projects to gain additional GFA, over and above the maximum allowed, if they integrate art permanently in the design of new commercial or residential buildings in the Central Area.

Mr Tanasijevich was speaking at a media briefing yesterday at the construction site of MBS where it was revealed that the IR will now also be 5-storeys higher.

Structural works are almost 75 per cent completed with the structure for the casino building already ‘topped up’ and the topping up for the three 55-storey hotel towers expected by July.

The hotel towers, which are currently at about the 28-storey level are simultaneously being fitted out.

All this with the aim of opening in time.

While Mr Tanasijevich said they hope to open by the end of 2009, ‘or close to it’, it is not clear yet which parts of the IR will open first.

He said what will likely open first will be the ‘primary contributors of revenue’. He added that MBS was currently in discussions with the authorities on the phasing of the ‘progressive opening’ of the IR.

Separately, Las Vegas Sands (LVS) chairman and CEO Sheldon Adelson, who was speaking in the US, said that estimates made by analysts for earnings by MBS were ’somewhat low’.

According to a Reuters report, analysts had estimated that MBS could generate Ebitda of between US$500 million and US$900 million.

But citing Singapore’s favourable tax regime, Mr Adelson said: ‘We will save 25 per cent on average on taxes.’

Mr Adelson’s comments come after LVS reported a loss of US$136.5 million in the fourth quarter of 2008, down from a profit of $39.9 million a year ago.

At the time of the filing on Feb 25, LVS also said that it had raised its annual cost savings target to US$250 million.

In addition to this, Mr Adelson said yesterday that it would try and ’squeeze out another US$200 million to US$250 million’. ‘If we do that, we are home free,’ he added.

According to its Q4′08 filings, LVS has unrestricted cash balances as of December 31 of US$3.04 billion while restricted cash balances were US$194.8 million.

Of the restricted cash balances, it said US$124.1 million is restricted for Macau-related construction and US$61.9 million is restricted for construction of MBS.

Total debt outstanding, including the current portion, was US$10.47 billion. Principal payments required to be repaid in 2009 and 2010 total US$114.6 million and US$197.6 million, respectively.

Source: Business Times – 5 Mar 2009

Marina Bay Sands on track to open by year-end

SINGAPORE : The US$5.4 billion Marina Bay Sands is on target to open by year-end.

The construction of its hotel towers has passed the halfway mark and is due to be “topped out” in July.

With the current downturn and parent company Las Vegas Sands running into money problems, there were concerns about the impact on the Marina Bay project.

But the company said funding is not an issue.

Bradley Stone, president, Global Operations & Construction, Las Vegas Sands Corp, said: “We have a fully-funded project here in Singapore. We put the financing in place in December 07. And we have been putting in equity as planned from the parent company.

“What happened in Macau (is that) we were launching those projects right in the face of the credit crunch. What happened in Macau certainly won’t happen here. The project is funded and a lot by local banks here in Singapore, and we are very confident in our ability to complete this on a timely basis.”

Marina Bay Sands said at least half of the property will be operational by year-end.

It is in discussions with Singapore authorities on the timeline.

George Tanasijevich, general manager and VP, Singapore Development, Marina Bay Sands, said: “We are not going to open this property until we have at least 50 per cent of it complete, and this includes all the compelling aspects of the project.

“Certain pieces will come on later. We are working with the tourism board and government to refine what that schedule will be. A sizeable proportion of the hotel rooms will be included in the initial opening.

“But I can assure you that what we open in the initial phase of it will be a full-fledged IR (integrated resort) that is compelling from a tourism standpoint and something that Singapore can be proud of.”

All four floors of the casino area have been constructed – with workers due to start on the roof next.

The massive convention and exhibition space and retail mall next to it is also making good progress.

And while construction for the Art Science Museum and theatres is still ongoing, plans for bringing in big acts like Broadway productions are underway.

The distinctive hotel towers – that slope at a 26 degree angle – with 2,600 rooms have reached the halfway mark at about 28 floors, with hotel rooms being fitted out in tandem.

The hotel towers may have reached their halfway mark, but Marina Bay Sands has yet to face its biggest construction challenge. That is when the floors go up all the way to the 55th level and they have to construct a sky park across all three levels.

When completed, the sky park, which is about the length of four and a half A380 airplanes, will have pools, gardens and a rooftop club.

But will all these facilities bring in the crowds the Singapore government is banking on?

Singapore’s visitor arrivals fell almost 13 per cent in January to 771,000 from the same period a year ago. However, despite the recent gloomy tourist arrival numbers, Marina Bay Sands remains confident the cards are stacked in its favour.

Nigel Roberts, president, Marina Bay Sands, said: “In spite of the market, we will come on line with something everyone will want to come to. It is going to be a ‘must do’ place to come (to).”

It plans to make Marina Bay Sands a global attraction, but the markets it is targeting first are China, India, Indonesia, Malaysia and Thailand, as well as the Middle East and Russia. – CNA/ms

Source: Channel News Asia, 4 Mar 2009

Genting Int’l to pour another $590m into IR

Resorts’ operating cash flows will be used to fund the extra investment

(SINGAPORE) Genting International has announced that Resorts World at Sentosa is now expected to increase its investment in the integrated resort (IR) to $6.59 billion, up from $6 billion.

In a statement released yesterday, it added that the additional investment will be funded by operating cash flows from the IR when it opens in the first quarter of 2010. ‘Financing for the resort is in place with the successful syndication of a $4 billion credit facility in April 2008. As at 31 December 2008, Resorts World at Sentosa Pte Ltd has awarded more than $4.5 billion of the $6.59 billion project costs,’ it said.

First to open will be four hotels, the casino, Le Vie Theatre, a 7,300-seat ballroom, and Universal Studios Singapore.

Resorts World’s chief executive officer Tan Hee Teck added that to date, it has drawn down $600 million of its credit facility. One third of the IR was funded by equity. About $2 billion has been set aside for interest costs and pre-operating costs.

At the time of opening, capital expenditure is projected to be less than $6 billion.

Mr Tan said that the increase in investment is due to changes made to the design and architecture of the integrated resort to improve its entertainment offerings, including enhancements to its casino and Universal Studios Singapore.

Of its Universal Studios attractions, 18 out of 24 are new or have been redesigned for Singapore.
Improvements were made to the quality of interiors as well as to foot traffic accessibility to retail and dining outlets.

The last time the budget for the Sentosa IR was revised upwards was in November 2007 – from $5.2 billion to $6 billion. This was attributed to building-cost escalation and more attractions being added.

The budget for Las Vegas Sand’s IR, Marina Bay Sands, has also been increased from US$3.6 billion to about US$4.5 billion.

While construction costs are said to be coming down this year, Mr Tan said that it would only benefit from contracts signed within the last two months.

The announcement comes on the back of Genting International’s full year financial results which saw it register a 14 per cent fall in revenue to $643.8 million, down from $751.6 million a year ago.

This was attributed to lower revenue from the group’s UK casino’s operations and lower interest income. Genting said that revenue from the UK casinos’s operations was affected by the weakening of pound against the Singapore dollar and lower business volumes.

It also reported a net loss of $124.8 million for FY2008, compared with a net loss of $381.5 million for FY2007. This can be largely attributed to a lower impairment loss on goodwill recorded in the current financial year for the acquisition of Genting Stanley of $100.8 million compared with $454.6 million in the previous year.

For the year, it also said that the UK casinos’s operations recorded a loss before impairment, foreign exchange losses and interest expense of $12.5 million compared to a profit of $53.4 million in 2007.

Mr Tan, however, is confident of the success of Resorts World at Sentosa as more cost-conscious Asian holiday-makers are travelling within the region. He said: ‘Asians are telling us they are doing medium to short-haul flights now.’

Source: Business Times , 20 Feb 2009

Sentosa, Marina IRs get pricier

Both are revising costs upwards for 2nd time

SINGAPORE’S two integrated resorts (IRs) are getting increasingly expensive, with both developers revising their cost estimates upwards for a second time.

An additional $590 million will need to be pumped into the kitty for the Sentosa project, while the price tag for the Marina Bay Sands development has gone up by US$900 million.

Resorts World at Sentosa yesterday revised the cost for the 49ha resort in its earnings call, bringing it up to $6.59 billion. This is the second time the budget has been revised: It was bumped up from $5.2 billion to $6 billion in November 2007.

Marina Bay Sands will cost more as well. At last week’s earnings call, Las Vegas Sands Corp announced its Singapore IR is estimated to cost US$5.4 billion, an upward revision from previous estimates of US$3.6 billion and US$4.5 billion.

No explanations were given by Sands for the increase in cost, but it raised US$2.1 billion last November in a rights issue to cover its projects, including the one in Singapore.

Resorts World at Sentosa chief executive officer Tan Hee Teck said yesterday that additional funding would come from operating cash flows when the casino resort opens next year.

The extra money was needed for improvements to the design of the casino project, he said. Areas which were tweaked included pedestrian flow, the monorail stop at the resort and adjustments to the 24 attractions.

He said: ‘We want to make sure each and every attraction is up to standard. We found we needed more money to bring the attractions up to a superlative level.’ Moreover, construction costs had risen sharply in the last few years, he added. Steel, for example, rose from $800 per tonne in 2007 to $1,800 last year.

CIMB-GK Song Seng Wun said it was simply bad timing that the IR projects were awarded at the peak of the construction boom, which led to costs spiralling upwards.

Construction projects awarded earlier do not benefit from prices softening since the global financial meltdown, as they had locked in materials at a higher rate, Resorts World’s Mr Tan said.

Despite the revision in budget and the ongoing global recession, Mr Justin Tan, managing director of parent company Genting International, said he is ‘still as confident’ in the success of the project.

As travellers trim their budget to take in short-haul travel, visitors from China and India who may have splurged on trips to Las Vegas or Europe would head to Singapore instead, he added.
Resorts World at Sentosa is slated to open on schedule by March next year.

One section of the resort is due for completion next week when its first 11-storey hotel, the Maxims Tower, is topped off. It will be the first development to be completed at either of the IRs.

Marina Bay Sands is expected to open in the fourth quarter of this year. However, it is uncertain which parts of the resort will be ready as Las Vegas Corp said only ‘certain features’ are targeted to be ready by December.

The resort has applied to the Government for a staggered opening, but has yet to receive official approval.

Source: Straits Times, 20 Feb 2009