By Krista A.M. Montealegre,
THE Udenna Group of businessman Dennis A. Uy is set to complete the funding requirements for an integrated resort and casino in Cebu, which is expected to turn profitable in the first full year of operations.
“The debt component is given by China Bank. They are very supportive,” Mr. Uy said in an interview, noting that an agreement will be signed soon.
To recall, the Udenna Group sold last May a 25% stake in Phoenix Petroleum Philippines, Inc. to ES Consultancy Group, Inc. for P4 billion to help finance the development of Lapu-Lapu Leisure Mactan, slated to become the first integrated resort and casino outside of Metro Manila.
Udenna is open to taking in a foreign partner to run the casino, but “we think we can do it on our own,” Mr. Uy said.
“A lot of the good managers and operators are Filipinos. They are in Macau and (Las) Vegas,” he said.
The group of Mr. Uy, through its wholly owned subsidiary Udenna Development Corp., will build the integrated resort and casino on a 12-hectare prime beachfront property at the Punta Engaño peninsula in Mactan Island, Lapu-Lapu City — six kilometers or a 20-minute drive from the airport.
Udenna will break ground on Lapu-Lapu Leisure Mactan by the end of July or August.
Target completion is slated in 2022, but the casino, retail complex and hotels are scheduled to open as early as 2019.
Asked when the project will become profitable, Mr. Uy said: “On year one of full operations.”
Lapu-Lapu Leisure Mactan will feature iconic modern buildings surrounded by lush greens and infinity pools. It will have a skydiving center on a pier; a retail complex; a convention center; luxury hotels and villas; specialty dining options; private residences; and condominium-hotels.
Mr. Uy downplayed concerns of oversupply in the gaming market, citing that it is the only player in Mactan and the modernization of the Mactan Cebu International Airport will boost foreign tourist arrivals in the area.
In the last four years, three integrated resorts have opened in Entertainment City, the Philippines’ response to gaming hubs in Las Vegas, Macau and Singapore. They are Solaire Resort and Casino of Bloomberry Resorts Corp., City of Dreams Manila of the SM group and Melco Resorts Entertainment, Inc., and Okada Manila of Japanese billionaire Kazuo Okada.
Travellers International Hotel Group, Inc., which runs Resorts World Manila in Newport City, has pushed back the opening of Westside City Resorts World — the fourth and last casino to rise in Entertainment City — because of oversupply issues.
Lapu-Lapu Leisure Mactan presents a “good alternative” to similar developments in Metro Manila, but the challenge lies in its ability to attract an international gaming operator with relevant a track record in turning greenfield locations such as Cebu as a new gaming location or a complementary development to the existing ones in the capital, said Claro dG. Cordero, Jr., head of Jones Lang Lasalle (JLL) Philippines’ research, consulting and valuation advisory services.
“As supply of gaming developments continue to increase, the prospects and opportunities for the new project lies in its ability to successfully differentiate in the long-term and the expected growth of tourist arrivals with the increased number of direct international flights due to the on-going redevelopment of the Mactan Cebu International Airport,” Mr. Cordero said.