State regulator Philippine Amusement and Gaming Corporation (PAGCOR) is bidding out two parcels of land in Manila’s Entertainment City on which the Solaire Resort and Casino stands.
PAGCOR announced on its official website on Wednesday that it is auctioning the two lots that have a combined area of 160,359 square meters (1.73 million sq feet). The starting bidding price for the twin plots is PHP37.23 billion (US$726.6 million), to be paid in cash.
The state-run firm has given Solaire operator Bloomberry Resorts Corp. – through its unit Sureste Properties Inc. – the right to match “the highest complying bid for the properties” since the casino operator has the leasehold rights.
Solaire’s lease expires in July 11, 2033 and is extendable for another term under certain conditions.
“The properties are subject of a long-term lease initially in favor of Bloomberry Resorts & Hotels Inc. who built and operate Solaire Resort & Casino,” PAGCOR said. “The Lessee has mortgaged its leasehold rights over the properties. In the same vein, the title and right over the buildings, structures, and other improvements thereon were likewise mortgaged to various lenders.”
The Philippines has strict protections when it comes to real estate. Its constitution prohibits foreigners from directly owning property in the country. PAGCOR has emphasized this when it said that “prospective bidders must be Filipino citizens or otherwise authorized by the law.”
Investors eyeing lots in Entertainment City must get a Filipino partner or create a corporation that would be 60 percent owned by the local partner.
PAGCOR did not disclose why it was selling the two plots of land.
The bidding will be held on November 27 at 2 p.m. in PAGCOR’s main office in Manila.
Entertainment City has been the Philippines’ answer to compete head on with the billion-dollar casinos in neighboring Macau and Singapore, as well as in Las Vegas and Australia.
In the first 9 months of 2016, the Philippine gaming industry was worth P118 billion in terms of gross gaming revenue (GGR). The casino-entertainment complexes in Entertainment City have been and will likely be the main money-makers and tourist draws in the coming years.
Investment bank Credit Suisse projected that the country’s gambling industry will earn GGR of $6 billion (P297.35 billion) by 2018, potentially making the Philippines among the world’s top 4 casino jurisdictions.