Good things worth waiting for, says MBS chief

Singapore

EVER since Marina Bay Sands (MBS) opened for business in April 2010, its senior executives have consistently made known their desire to invest more in Singapore and to expand the footprint of the integrated resort (IR).

In 2016, MBS first began discussions with the government on its proposed expansion plans. At the time, there was still a year to go before the 10-year exclusivity period (dated from when the contracts to develop the IRs were awarded) for Singapore's two casino operators was to expire.

Resorts World Sentosa is Singapore's other IR operator.

After rounds of hush-hush negotiations, it was announced on Wednesday that Las Vegas Sands (LVS), the parent company of MBS, will spend S$4.5 billion on a new building adjacent to its three existing hotel towers.

On the roughly 3.2-ha site - which works out to about 32,000 sq m or so - will rise a hotel tower with about a thousand luxury suites, a sky roof with a swimming pool, and a 15,000-seater entertainment arena to stage major concerts from around the world.

There will also be additional space for the IR to hold more Mice (meetings, incentives, conventions and exhibitions) events.

MBS president and chief executive George Tanasijevich said in an interview with The Business Times on Thursday: "Good things are worth waiting for, and we're very pleased to have this opportunity."

The American, who is also the managing director of global development at LVS, also hailed the government's decision to extend the casino duopoly until the end of 2030.

"As an investor, you're always looking for certainty. You want a predictable environment, and to understand what you're going to face in the future as much as possible," he said.

He noted that the reasons for an exclusivity period were both important and appropriate when the casino licenses were first awarded - and remain relevant today.

"It's a clear sign that the Singapore government understands the mindsets of investors and what motivates them, and what will contribute to substantial foreign direct investment here," he said.

In its initial announcement on Wednesday, LVS did not state exactly when the new tower would be complete; it only said that work would "quickly begin".

Mr Tanasijevich said there is no firm deadline for now because things are still in the design phase. However, when asked whether construction could start some time later this year, his response was: "Probably not."

Renowned architect Moshe Safdie, who designed the original structure, along with global architecture firms Aedas and Gensler, are planning to be part of the team responsible for the design elements of the new tower.

"Under the agreement (with the Singapore government), we have to get everything done in eight years, but that's not the date we're looking at," said Mr Tanasijevich. "We're going to move as fast as we can."

The size of the hotel suites in the fourth tower still needs to be worked out. The team has also not decided on how to spread out the space for the tower's ballroom and meeting and exhibition facilities.

Mr Tanasijevich is aware of the pressing need to get the new tower up and running sooner rather than later, given the number of countries in the region with their sights locked on the lucrative IR pie.

South Korea has already opened its first IR on Jeju Island; Taiwan and Japan are among the other major markets that will launch their first IRs in the coming decade.

"We're very mindful of the emerging competition. We're never complacent, we will stay proactive and analyse what we need to do to increase our competitive position," said Mr Tanasijevich.

He expressed confidence that MBS would be able to fill the extra inventory of 1,000 hotel suites. Since 2010, MBS' 2,561 rooms and suites in its three towers have had annual occupancy rates of between 94 and 99 per cent.

"The demand that we experience is a very clear indicator to us that there are probably people that would like to stay at MBS, but can't get a room. Hence, we felt we should pursue an opportunity that would be able to satisfy that unmet demand and also create additional demand."

Referring to the entertainment arena's 15,000 seats, he said that capacity would be a "sweet spot" in Singapore, where no existing concert venue can accommodate an audience of that size.

Commenting on the authorities' move to let MBS have an extra 2,000 sq m of casino space as a result of the new investments, he disclosed that the IR has no firm plans to expand its existing 15,000 sq m casino for now.

"This is going to be an opportunistic situation, as we try to anticipate what the future demand is, what future visitations will be, and what the level of growth will be.

"Only then will we decide whether to exercise the option to acquire some or all that additional space."

At the New York Stock Exchange on Thursday at 11.40am (11.40pm, Singapore time), Las Vegas Sands Corp's share price was US$64.89. The shares closed at US$64.17 on Wednesday.

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