Stalled Macau development gets new ownership

A stalled development on Macau’s Cotai Strip was given new life this week.

Melco Crown Entertainment announced late Wednesday it had acquired 60 percent of Macau’s Studio City, a large resort development expected to include multiple hotels, a casino, and entertainment attractions.

Melco Crown is a joint venture between Hong Kong’s Melco International Development Ltd., which is controlled by Hong Kong businessman Lawrence Ho, and Crown Ltd., which is controlled by Australia’s James Packer.

The company will buy out one of the project’s developers for $260 million and pay another developer $100 million for a portion of its stake.

Union Gaming Group Principal Grant Govertsen, who is based in Macau, said Macau Studio City has a value of $600 million.

The project is located on 32 acres adjacent to the Lotus Bridge, which connects Cotai with Mainland China. The site is also expected to house a key stop on the region’s planned light rail system.

Melco Crown operates City of Dreams on the Cotai Strip near the Venetian Macau. Ho, the son of billionaire Macau casino magnate Stanley Ho, said the project would add to the company’s presence in Macau.

"We remain bullish on Macau's prospects and believe high quality new supply, such as Macau Studio City, will continue to drive incremental demand and broaden the appeal of the market,” Ho said in a statement. “The property's theme and demographic focus are designed to be clearly differentiated from our existing portfolio of assets, as well as from our competitor's facilities in the market.”

Govertsen said it was possible Macau Studio City could open by 2014.

“This project not only gives Melco Crown a growth pipeline in Macau, but it positions the company to potentially be the first to open its doors relative to the concessionaires who are still waiting on final Cotai land approvals from the Macau government,” Govertsen said.