With The Venetian Macao now up and running, attention has changed to the next Las Vegas Sands (LVS) big project – The Marina Bay Sands. The construction of Singapore’s first integrated resort casino may remain on schedule but it is unlikely to remain on budget. Estimates are for an overspend of between 20% and 40% on the original US$3.6 billion. Just as in Macau, construction costs are spiralling upwards and, according to LVS president and CEO William Weidner, the company is looking for more efficient construction methods.

Exacerbating the problem is an Indonesian ban on the export of sand from its land, imposed last January. At the beginning of August LVS reported borrowings related to the US$1.4 billion credit facility to support the development of The Marina Bay Sands. In the second quarter 2007, capital expenditure on construction and development activities in Singapore were US$85.3 million. With a booming construction industry in much of Asia, the costs of both raw materials and labour are fast rising beyond original budgets.

Weidner commented, "In Singapore, we continue to make steady progress on construction and other development activities of The Marina Bay Sands, which remains on track for an opening in late 2009. We currently have over 1,100 workers on site with work progressing on a 24/7 basis.” The resort will have 2,500 hotel rooms in three 50-storey towers, around 1.2 million sq ft of flexible convention and exhibition space and 1 million sq ft of retail space.

Las Vegas has moved strongly into non-gaming activities and the opening of The Venetian Macao and, in due course, other developments on Macau’s Cotai Strip, is intended to broaden the appeal of Macau. One year ago LVS said that its team of Meetings, Incentive, Convention, and Exhibition (MICE) professionals continued to assemble the world's top trade show organizers to support the company's burgeoning presence in Asia.

This August Weidner said, “We have now begun to accept indications of interest from retailers, restauranteurs, and other potential tenants from around the globe for tenancy at The Shoppes at The Marina Bay Sands, and we are pleased to report that the indicative rents reflected in these indications of interest reflect the strength and vibrancy of that robust market.”

As one of the leading international developers of multi-use integrated resorts, LVS is also planning the development of a non-gaming complex on Hengqin Island in the People’s Republic of China. Working with the Zhuhai Municipal People's Government, the plan is to develop a complementary trade-fair, convention, and leisure destination on Hengqin Island, which is adjacent to the Cotai Strip.

The convention and exhibition space at The Marina Bay Sands will be one of the largest in Asia, and LVS is gambling that it will be able to fill it, and its properties in Macau, with sufficient non-gaming business to make its Asian adventure a big success.
(E-08.29.07)

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