Las Vegas Sands approved to sell apartments in Macau

6 June 2013

By Howard Stutz

LAS VEGAS -- Las Vegas Sands Corp. gained approval from Chinese officials to sell 300 co-op style apartments at the Four Seasons Macau. Analysts said sales proceeds could be worth from $775 million to more than $1 billion to the company.

The long-awaited approval was announced Wednesday by the Macau government. The 30-story building, which is next to the Venetian Macau on the Cotai Strip, was completed in 2009. The building will become part of the Four Seasons Macau.

In a report to investors, Union Gaming Group said the sale of Four Seasons residential units has been discussed and speculated since 2009.

“(The) announcement finally paves the way for Las Vegas Sands to ultimately monetize the asset,” Union Gaming Group Managing Director Bill Lerner said. “All in, this is clear positive development for Las Vegas Sands.”

Analysts said the strong demand for housing in Mainland China and Macau since the apartment units were completed could increase the value of the development.

“Las Vegas Sands has a rich VIP and premium mass customer list that could be sourced to market this high-end residential project,” JP Morgan gaming analyst Joe Greff told investors.

Macau is the world’s largest gaming market, collecting $38 billion from gamblers in 2012. Through May, gaming revenues in Macau are up more than 14 percent over the same five months of last year.

In a statement, Las Vegas Sands Chairman Sheldon Adelson said international visitors to Macau might be interested in owning one of the residential units.

“The addition of the Four Seasons-branded apartments will provide visitors from surrounding countries the opportunity to own a tourism product which will allow them to utilize the full facilities of the Cotai Strip more frequently and for longer periods of time,” Adelson said.

Las Vegas Sands operates four casino-resorts in Macau and generates more than 60 percent of the company’s revenues from the market. Las Vegas Sands is planning to build a Paris-themed resort on the Cotai Strip region.

The company’s Chinese subsidiary, Sands China, is publicly traded on the Hong Kong Stock Exchange.

Shares of Las Vegas Sands fell $1.11 or 1.9 percent on the New York Stock Exchange Wednesday to close at $57.35.

Wells Fargo Securities gaming analyst Cameron McKnight told investors he thought the announcement would be a “positive catalyst” for Las Vegas Sands’ shares.

“The eventual proceeds could be used to pay a larger dividend at Sands China and therefore Las Vegas Sands,” McKnight said.