GGRAsia – Galaxy halts some Cotai build over virus, 1H 2021 still aim

Galaxy halts some Cotai build over virus, 1H 2021 still aim

Feb 25, 2020 Newsdesk Latest News, Macau, Top of the deck

Macau casino operator Galaxy Entertainment Group Ltd has confirmed to GGRAsia it has “temporarily suspended” some construction work in the wake of the region’s coronavirus alert, but is still aiming at a first-half 2021 launch for a portion of Phase 3 of its Galaxy Macau casino resort (pictured in a file photo).

“In order to support the contagion-control efforts of the Macau SAR government, Galaxy Entertainment Group has temporarily suspended some of the construction work, except a few critical projects,” said Buddy Lam Chi Seng, senior vice president of public relations, in an email to us in response to our enquiry.

He added: “We remain optimistic about our current development plans and will continue to do our best to stay on schedule, with Phase 3 opening in the first half of 2021.”

The firm further stated: “We are continuing to monitor the coronavirus’ impact on the industry and will adjust our plans as the situation requires.”

Phase 3 of Galaxy Macau is to feature 1,500 hotel rooms, some casino space, a large-scale arena with 16,000 seats, and 400,000 square feet (37,161 sq metres) of MICE space. The company announced in early November that it planned to open an Andaz hotel, a brand of Hyatt Hotels Corp, as part of the property’s expansion.

A recent note from JP Morgan Securities (Asia Pacific) Ltd had said that a 14-day quarantine rule introduced from February 20 by the Macau authorities – and applicable to non-resident workers that might wish to cross the border from mainland China – could in the brokerage’s view, “affect the opening schedule” for upcoming Cotai properties “to a certain extent, as the majority of construction workers are non-residents living in Zhuhai,” in neighbouring Guangdong province.

JP Morgan analysts added, referring to the official name for the newly-classified illness: “Including the broader impact from Covid-19 on logistics etc., we see a possibility that the opening of new properties (e.g., SJM [Holdings Ltd’s] Grand Lisboa Palace, Galaxy [Entertainment’s] Phase 3, Sands [China Ltd’s] the Londoner Macao), may be pushed out by a couple of months versus prior schedules.”

GGRAsia also approached SJM Holdings and Sands China for comment, but had not received a reply from either on the topic by the time this story went online.

Prior to the Covid-19 episode, which was first widely reported in Hubei province, mainland China, SJM Holdings’ management had said its HKD39-billion (US$5 billion) Grand Lisboa Palace was expected to open before the end of this year.

Studio City, Londoner Macao

In other developments, Lawrence Ho Yau Lung, chairman and chief executive of fellow Macau operator Melco Resorts and Entertainment Ltd, was asked on the group’s fourth-quarter and full-year earnings call on February 20 about the impact of the coronavirus issue on construction for phase two of the Studio City casino resort on Cotai. He said the crisis was likely to lead to a “significant slowdown” of construction workers coming in from mainland China.

“We do expect that there’s going to be a slowdown – a significant slowdown of those workers coming in,” noted Mr Ho.

Geoff Andres, property president of Studio City, said on the same call it was probably “still too soon” to tell if there would be any “long-term” effects on construction linked to the coronavirus alert, but added that currently piling work for Phase 2 of the property was being done, and there was “activity on a daily basis” at the site.

According to investment analysts, Sands China’s parent United States-based Las Vegas Sands Corp, had previously indicated prior to the public health alert in Macau that the Londoner Macao Hotel – a component of the work to convert the Sands Cotai Central complex into a themed resort called the Londoner Macao – might see construction concluded this year.

A senior executive at Las Vegas Sands had said on the parent’s fourth-quarter earnings call on January 29 – in response to a question from an analyst – that the group would look at whether the crisis-driven lull in casino business might be an opportunity to advance conversion of Sands Cotai Central.

Sands China said on Friday that gaming operations at its Sands Cotai Central resort were to resume on Thursday (February 27), a week later than other company casinos, following the 15-day local-government-ordered shutdown that ended on February 20. But two hotels at the resort - the St Regis Macao, Cotai Strip; and Conrad Macao Cotai Strip remained shuttered as of Tuesday, according to the Macao Government Tourism Office website. They had been closed since February 7 for commercial reasons at the behest of Sands China, according to Macau’s tourism bureau.