HIGH-END PROPERTY developer Belle Corp. will mark its entry into the lucrative gaming industry with the construction of a multibillion-peso casino complex in Parañaque next year.
Should the casino project prove to be more profitable than its property business, Belle Corp. vice-chairman Willy N. Ocier said in an interview that the company might swap undeveloped properties in its Tagaytay Highlands flagship project with shares in sister Highlands Prime, Inc. and let the latter handle the development of the entire place.
"It is the general overhaul of the casino [industry] in the country [that we are preparing for]. You have to remember that the casino has been run by the government for almost [three decades] and now they woke up ... [they] will just give licenses so that the casino will be owned and operated by [private firms] which will allow more [advanced] games," Mr. Ocier said.
The group plans to start the construction of its P14-billion casino complex on its 6.2-hectare Parañaque lot next year, while its operations will start in 2011. The P14 billion is part of the total P46-billion investment commitment given by Belle and the SM group to state-led Philippine Amusement Gaming Corp. (Pagcor), which is pushing for the development of a huge entertainment and leisure project at the Manila Bay reclamation area.
Pagcor gave licenses to Aruze of Japan, a consortium led by Megaworld Corp. of Andrew L. Tan, and Premium Leisure and Amusement, Inc.
Belle recently bought Premium Leisure and Amusement from the Henry Sy-led SM group, with the mall and banking conglomerate getting more shares in listed Belle in return. The Sy family now holds a 50% stake in Belle.
Mr. Ocier said the remaining P32 billion, which will be used for the non-gaming developments like hotels, would be shouldered by the SM group.
The location of the proposed casino, will allow it to serve as the "gateway" to Pagcor’s ambitious Bagong Nayong Pilipino Manila Bay Entertainment City project.
The Belle project will have retail and hotel components. To jump-start it, Belle will start with 15 suites to accommodate the "high rollers," Mr. Ocier said.
Belle will likewise create a special purpose vehicle to accommodate the entry of foreign investors who will bring in funds and the expertise to manage the casino. This will give Belle the flexibility to open more casinos in the future, he said.
Mr. Ocier did not disclose the identities of the foreign operators but said Belle was talking to three publicly listed foreign firms.
"The casino business is all about tourism and entertainment. The gaming market in Asia is very big that is why you see multi-billion projects being done in Macau and Singapore and we are basically just catching a small part of the market," he added.
Mr. Ocier said Belle was looking at attracting players from the Asian markets especially those who do not want a "highly regulated environment."
The Philippines should be able to attract many "hardcore" players, he added.
"Eventually, the Pagcor casinos will be phased out or will lose their business to us ... when we start making money and [building] new casinos, it will create that market to pull in more demand from other [countries]," he said.
Share swap?
The gaming business is said to be one of the most profitable in the country, proving to be resilient during economic downturns.
Revenues generated by listed Pacific Online Systems Corp., for instance, grew by almost a third to P495.5 million from January to June, while that of Philweb Corp. surged by 88% to P363 million. Profits of listed Prime Gaming Philippines, Inc. and Leisure & Resorts World Corp. also rose during the period.
When asked whether the company was willing to give up its property business to Highlands Prime, Mr. Ocier said Belle was open to the idea and studying it carefully.
But Belle has yet to make a final decision since the casino project is not yet operational.
"That is how we want to rationalize the two companies. In two years or three years’ time, we would want to sit down and look at our priorities and our direction because we would like to think that a big part of our revenues will come from the casino business," Mr. Ocier said. "It [would] not make sense for the two companies to be doing the same thing and selling to the same market. [Selling our undeveloped lands to Highlands Prime] is something that we are considering."
Belle owns 36% of listed Highlands Prime, which also develops parts of Tagaytay Highlands.
Mr. Ocier said Belle will likely undergo a share swap with Highlands Prime for its undeveloped 800 hectares should it decide to leave the property business. Belle estimated the value of the land to be at P800 million.
Belle has long been making attempts to tap the gaming and leisure industry. More than a decade ago, it made plans to develop a casino-hotel project on the same Parañaque lot but this was shelved because of the Asian financial crisis. It also failed in an attempt to revive the jai-alai betting business.
Shares in the firm climbed by 1.42% to P1.42 on Friday.
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BY KRISTINE JANE R. LIU, Reporter
Story Location: http://www.bworldonline.com/BW101209/content.php?id=044
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