Preliminary Approval Granted for $800M Casino Resort in South Korea
- Mar 26, 2014
The Ministry of Culture, Sports and Tourism of the Republic of Korea granted pre-approval for the development of the first internationally branded integrated entertainment resort in South Korea. Integrated property developer OUE Ltd. announced that a consortium formed of OUE, Lippo Ltd. and Caesars Entertainment Corp. have planned a project that aims to deliver a world-class entertainment destination featuring hotel, retail, convention and residential properties.
The project, developed by the consortium, is expected to be finalized in time for the 2018 Winter Olympics in South Korea and will feature a foreigners-only casino. The project investor and operator of the casino will be Caesars Entertainment Corp. The corporation has announced that it may elect to include Caesars Growth Partners L.L.C., a joint venture between Caesars Entertainment and Caesars Acquisition Co., in the development project. If that will be the case, Caesars is anticipating that Caesars Growth Partners would make the capital investment associated with the project and Caesars Entertainment would act as the operator and would share the management fee associated with the project.
“We are grateful to the Korean government for their initial approval, paving the way for the opportunity to build and operate our first integrated resort in Korea,” said Gary Loveman, Caesars Entertainment chairman, CEO & president. “We are excited about the opportunity to expand our network and brands to Asia. Foreign visitation to South Korea has grown significantly, and we look forward to creating a world-class destination to further support Korea’s economic growth and tourism goals.”
OUE will hold a significant non-controlling interest in the project and will focus on the hotel component and convention center of the project.
“OUE’s participation in this landmark project – in particular the hotel component and convention center – reflects our ability to secure unique property development opportunities to drive OUE’s future growth and generate value for our shareholders,” said Stephen Riady, executive chairman of OUE Ltd. “OUE brings to the project its expertise in developing and operating large-scale hospitality, retail and commercial properties,” he added.
The total project cost is estimated at Korean Won 855 billion ($800.6 million) and will feature a total development gross floor area of more than 150,000 square meters (1,614,586 square feet) on 4.3 hectares (10.63 acres).
There is also a preliminary master plan that includes potential future phases of the integrated resort with an estimated total project cost, including the above mentioned total project cost of the first phase, of approximately Korean Won 2.3 trillion ($2.15 billion).