Developers placing bets on casinos overseas
Updated: 2014-07-28 20:36
By YAO JING
Chinese real estate companies are trying to participate in overseas casino projects as the sluggish property market at home is leading to a drop in profits.
In the first half of 2014, Jeju Island in South Korea and Queensland in northeast Australia became the most popular destinations for Chinese developers, according to a report released by Morning Whistle Group, a Shanghai-based Internet platform that helps Chinese capital conduct cross-border investment and overseas mergers and acquisitions.
Earlier this month, the Shanghai-based developer Greenland Holding Group announced it was forming a consortium with Australia's Crown Resorts to bid on a large-scale, mixed-property complex that includes a casino in Brisbane's central business district.
The State-owned developer has been trying to diversify its overseas business to maintain its growth. The company said it aims to double its overseas sales to 40 billion yuan ($6.4 billion) next year.
Aquis Casino Acquisitions, a company controlled by billionaire Hong Kong developer Tony Fung, planned to make acquisitions of $270 million, including Reef Casino Trust and Casino Canberra.
At the same time, ASF Consortium said it would accelerate plans for a $7.5 billion resort, casino and cruise ship terminal in Queensland.
The South Korean government has approved construction of its first foreign-owned casino, developed by US firm Caesars Entertainment and Indonesian conglomerate Lippo Group.
Teaming up with Genting Singapore, Chinese property developer Landing International Development also planned to develop a $2.2 billion casino resort in South Korea.
"The gambling industry is illegal on the Chinese mainland, but the sooner-than-expected rise in return has attracted increasing numbers of Chinese real estate players betting on overseas markets," said Chen Xiaoyi, an analyst at Morning Whistle.
In 2013, about 4 million Chinese tourists visited South Korea, with 1.8 million going to Jeju. At the same time, South Korean casinos hope to benefit from the increasing number of Chinese tourists.
Chinese tourists have also named Australia as their most desired overseas holiday destination. Queensland is planning to release more casino licenses in 2014 to break the monopoly of local gambling industries.