Sy holding firm partners with units to develop gambling hub

MANILA, Philippines - Sy-led holding firm SM Investments Corp. (SMIC) will partner with its subsidiaries to develop a world-class entertainment hub in Pasay City. In a disclosure, SMIC said it would form a consortium with its units to "jointly undertake the development of an integrated entertainment complex under the Phillippine Amusement Gaming Corp.’s (Pagcor) Bagong Nayong Pilipino Entertainment City project." The holding firm will partner with newly incorporated Premium Leisure and Amusement, Inc., SM Commercial Properties, Inc., SM Land, Inc., SM Development Corp. and SM Hotels Corp. The holding firm of the country’s richest man said it would pursue the transformation of the 60-hectare Mall of Asia Complex into a world-class business and entertainment hub in front of Manila Bay after securing a provisional license from Pagcor. The plan is in line with the group’s thrust into tourism development as SM develops other projects like Hamilo in Batangas and a chain of high-end and boutique hotels, and convention centers nationwide, SM Vice-Chairman Henry Sy, Jr. said in a statement. SMIC will proceed with the first phase of the project, estimated to cost around P10 billion, next year. The entertainment hub will have a number of hotels in front of Manila Bay to be operated by international hotel chain brand Radisson and Regent. It will also include high-end retail establishments, a structure that will be operated by an international casino operator, and a theater for the performing arts, along with a residential component and a ferry terminal that will directly link the Mall of Asia Complex with SM’s Hamilo project. SMIC was one of the three companies that were given a license by the government casino franchise firm to develop the Bagong Nayong Pilipino, along with Andrew Tan’s Travellers International Hotel Group, Inc. and Japan-based company Aruze. Under the terms of reference for the Bagong Nayong Pilipino development issued last year by Pagcor, companies wishing to apply for licenses to run integrated casino entertainment complexes must submit proposals with a minimum project cost of $1 billion, consisting of both equity and debt. The initial phase of the project involves about 40 hectares of reclaimed land along Manila Bay in Parañaque. Other locations in the vicinity may also qualify for Pagcor approval. The government expects the project’s full implementation to triple Pagcor’s yearly income to $1.5 billion, which means higher National Government share in the profits. Applicants who want to own land must meet the constitutional cap of 40% foreign ownership. Companies that opt to lease Pagcor-owned land may be fully owned by foreigners. In November, SM Commercial Properties, Inc. set up a unit called Premium Leisure and Amusement, Inc. to handle the development of real estate that will be leased to gambling firms. — Kristine Jane R. Liu, BusinessWorld