VS has plans for approximately 80 hectares of development on the Cotai Strip totaling as much as us$ 11 billion, according to SEC filings. The Venetian Macau is a 3,000-unit all-suites hotel, casino and convention center complex with a Venetian-style theme similar to that of The Venetian in Las Vegas. In addition to the 39-story hotel tower, the Venetian Macao includes approximately 92,903 sqm of retail and dining offerings, and 111,483 sqm of convention and meeting space.
The Four Seasons Macau is slated to be a 400-room boutique hotel with approximately 74,322 sqm of Four Seasons-serviced luxury apartments, 19,509 sqm of upscale retail and an 7,432 sqm casino plus restaurants, a full service spa and other amenities.
The amendment to the land concession agreement separates the retail uses of the Four Seasons Macau from the hotel use and creates four separate parts: a 111,483 sqm piece that includes a five-star hotel with gaming areas, entertainment, leisure, restaurants and other supporting areas; a one-million-sf four-star apartment hotel; a 380,000-sf Shoppes at the Four Seasons retail shopping area and a 31,494 sqm parking area.
LVS says it plans to transfer the apartment-hotel tower component to a separate cooperative holding company and begin selling shares in the new holding company to third parties interested in acquiring vacation units at the Four Seasons Private Residences Macao. “The subdivision of the Four Seasons Macao Hotel will also enable VCL to monetize the cash flow generated by the Shoppes at the Four Seasons at an appropriate time in the future,” states LVS in an SEC filing Monday morning.
LVS has plans for six casino-resort developments in addition to the Venetian Macau on 200 acres on the Cotai Strip. It entered into the land concession agreement in February 2007 after it was awarded a land lease concession for three parcels, including the site on which The Venetian Macao was built-parcel 1- and the site on which the company is building a Four Seasons hotel-parcel 2.
LVS made an initial premium payment of approximately us$ 106.7 million -towards the aggregate land premium for parcels 1, 2 and 3 of approximately us$ 323.9 million -minus a us$ 24.2– million credit it received for reclamation work and other works done on the land and the installation costs of an electrical substation. The land concession became effective in April. In July, LVS paid approximately us$ 102.2 million for the balance of the land premium payment due on parcel 1.
The company is required to make additional land premium payments on the remaining parcels 2 and 3, and annual rent payments relating to all three parcels upon the completion of the corresponding resort or be payable through seven equal semi-annual payments, bearing interest at 5% per annum, to be made over a four-year period, whichever comes first.
The amendment to the land concession resulted in an increase in the annual rent payable to the Macau Government associated with the Four Seasons Macao Hotel from approximately us$ 542,000 to us$ 552,000. In addition, LVS was obligated to pay an additional land premium in consideration of the changes of approximately us$ 17.8 million.
The company does not yet have all the necessary Macao government approvals that it will need in order to develop its planned Cotai Strip developments on parcels 3, 5, 6, 7 and 8 but says it is working toward those approvals. Here is a breakdown of what would occur on those parcels. The information was taken from the company’s annual report filed in August.
For Parcel 3, LVS says it has signed a non-binding memorandum of agreement with an independent developer for A 3,600-unit project that would include hotel rooms, serviced luxury vacation suites, a casino and a retail shopping mall. “We are currently negotiating the definitive agreement pursuant to which we will partner with this developer to build a multi-hotel complex, which may include a Cosmopolitan hotel,” the company states in the filing.
Parcel 5 is slated to include a three-hotel complex with approximately 2,450 luxury and mid-scale hotel rooms, serviced luxury apartments, a casino and a retail shopping mall. “We will own the entire development and have entered into a management agreement with Shangri-La Hotels and Resorts to manage two hotels under its Shangri-La and Traders brands,” the company states. “In addition, we are negotiating with Starwood Hotels & Resorts Worldwide to manage a hotel and serviced luxury apartments under its St. Regis brand.”
Parcel 6 is intended to include a two-hotel complex with approximately 4,000 luxury and mid-scale hotel rooms, a casino and a retail shopping mall physically connected to the mall in the Shangri-La/Traders hotel podium. “We will own the entire development and are negotiating with Starwood Hotels & Resorts Worldwide to manage the hotels under its Sheraton brand,” the company states.
Parcels 7 and 8 would each hold a two-hotel complex with approximately 3,000 luxury and mid-scale hotel rooms, serviced luxury vacation suites, a casino and retail shopping malls that are physically connected. “We will own the entire development and have entered into non-binding agreements with Hilton Hotels to manage Hilton and Conrad brand hotels and serviced luxury vacation suites on parcel 7 and Fairmont Raffles Holdings to manage Fairmont and Raffles brand hotel complexes and serviced luxury vacation suites on parcel 8,” the company states. “We are currently negotiating definitive agreements with Hilton Hotels and Fairmont Raffles Holdings.