As Macau Gaming Market Sours, Sands Looks to Offload Signature Property
- Apr 28, 2009
In yet another indication of just how global the hospitality market slump has become, Las Vegas Sands is reportedly looking to cash out on one of its casinos in Macau under a sale- leaseback deal. The firm is looking to put the Sands Macau up for sale with a price tag of $1.3 billion after failing to sell off the retail portions of two of its other properties there.According to a report in the South China Morning Post, Las Vegas Sands is looking to sell the 229,000-square-foot gaming resort–the firm’s signature Macau property–and continue to run gaming operations there under a sale-leaseback with the new owner. The report said that discussions with potential buyers began last week. But the firm could have a hard time finding a buyer at the listed priced. Macau’s gaming industry has been hard-hit by the global economic slowdown, as fewer tourists flock to the Chinese peninsula. Sands’ attempt to sell the shopping centers attached to the nearby Venetian and Four Seasons resorts ran aground after potential buyers balked at the $1 billion asking price. The same situation could well arise for the casino sale, which might impel the firm to lower its price, or call off a deal entirely. Sands, however, could certainly use the cash that a sale would bring. In November, the company halted work on a new $3.3 billion, 6,400-room resort close to the Venetian, a delay that it blamed on the global credit freeze. The Macau market in general has mirrored Las Vegas’ well-documented recent slowdown as the economy has soured. When Macau Sands was opened in 2004, the firm made back its initial $240 million investment within a year. But the market has taken a severe turn since then, as both economic factors and tighter travel restrictions by the Chinese government have stifled tourism.