Wynn Macau has gained approval for a new project on the Cotai strip. The Wynn Resorts subsidiary accepted the terms of a land concession contract sent over by telegram from Macau’s government. It means the casino business can develop 51 acres on Cotai into a resort that will include a five-star hotel, retail, entertainment, food and beverage concessions, and spa and convention offerings. This is in addition to the gaming areas that are Wynn’s forte.
Wynn will pat the government a $193.43million land premium before ground is even broken. Rent on the site will sit at $771,738 per annum whilst it’s being developed, a figure that will rise to $1.08m per year once the development has been completed. Macau has given Wynn 60 months to complete the project and the Wynner revealed that the enclave could review rent every five years if they so wish.
The project was delayed after Steve Wynn liked what he saw at the enclave’s newest resort, Galaxy Macau, enough to change his own plans. Since that premises opened, Wynn has seen his firm pushed to fourth position on the enclave that provides them with 70% of the entire company’s revenue. Macau approving Wynn’s project may give those operating on the enclave more optimism than they had this time last week. The leasing deal lasts for 25 years and could signal that they may get in shift on regarding the renewal of casino licenses.
As concerns over whether there are enough construction workers on the enclave to fund the project, J.P. Morgan gaming analyst Kenneth Fong said, “The approval means Wynn can start initial soil testing and construction work. Based on the experiences of other projects in Macau of this size, we believe Wynn Cotai should be able to open by the end of 2015.”
Estimates put the cost of the project at anything between $2billion and $3billion.