MANILA, Philippines – The country’s oldest conglomerate is not interested in joining the investment frenzy in the gaming industry, even if the biggest real estate players and the region’s casino billionaires are scrambling for a piece of the pie.
As Manila gets ready to become Asia’s new center for gaming through the upcoming Entertainment City, Ayala Land Inc., the property unit of Ayala Corp., is not keen on adding it in its family-oriented portfolio.
“The Entertainment City is a Pagcor project which implies there will be a lot more focus on the gaming side. Our focus will be on family entertainment,” said Ayala Land president Antonino Aquino.
He stressed this during a press briefing on Friday, January 11, to launch its own entertainment district in Makati known as Circuit Makati, which will have a strong focus on family-oriented entertainment.
“We feel that on our side we can sustain our high growth projector with the types of business we are developing right now. We have enough on our plate to be able to sustain our aggressive growth into the future,” he added.
Ayala Land has been aggressively bidding for government infrastructure projects, including tollroad, rail, airport, and real estate projects. It also has ongoing multi-billion development projects in sprawling areas in Fort Bonifacio Global City in Taguig, Quezon City, and at its crown jewel, Makati City.
Retail and casino
Ayala Land’s competitors in the real estate and retail businesses have been aggressively sealing deals with the 4 groups that Philippine Amusement and Gaming Corp. (Pagcor) has granted licenses to for the upcoming US$4-billion Entertainment City development.
The project has seen a lot of interest from both local and foreign investors, including Macau’s Melco Crown Entertainment, Japanese tycoon Kazuo Okada’s Universal Entertainment, Malaysia’s Genting Bhd and Las Vegas-based Global Gaming Asset Management (GGAM).
Real estate tycoon Andrew Tan has joined forces with Malaysia’s Genting, while Robinsons Land, owned by another tycoon, John Gokongwei, has partnered with Okada’s Universal Entertainment to develop commercial facilities, hotels and residential projects at the Entertainment City.
Through Belle Corp., the group of the country’s richest, Henry Sy, has teamed up with Macau casino giant Melco Crown Entertainment Ltd., which in turn is run by Australian billlionaire James Packer and Macau’s Lawrence Ho.
“There are some possibilities on the retail front but not on the gaming front,” noted Aquino.
“We know that, sometimes, there are risks involved,” he stressed.
Manila currently has a large-scale casino complex, Tan-led Resorts World Manila, which opened in 2010 and generates $355 million in annual revenues. The completion of Entertainment City is expected to put the Philippines on the international gaming map, tripling gaming revenues to $3 billion by 2015.
The country’s location, being positioned only a few hours flight away from China, Japan and South Korea, where Asia’s biggest gamblers come from, will boost the industry’s revenues.
The Philippines also enjoys favorable tax incentives compared to nearby Macau. In Macau, gaming tax is 40% with an additional 12% corporate tax added on top. In the Philippines, the mass-market tax is 25%, while the VIP tax aimed at high-spending foreigners is only 15%.
Real estate consultancy firm, CBRE Philippines in November predicted that in the next few years, the Philippines is expected to be at par with casino destination Las Vegas in terms of gaming industry revenues.
“In 5 years, the Philippines will challenge Macau and Las Vegas in casino revenues,” said Rick Santos, chairman and managing partner of CBRE Philippines. - Rappler.com
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