Suncity Buys Property In Japan's Miyako Island To Develop New Hotel And Casino
The subsidiary of Macau's largest VIP junket operator, Suncity Group, is now eyeing a massive expansion project in Japan's Miyako Island.
Suncity Group Holdings Limited revealed in its filing with the Hong Kong Stock Exchange that it has already agreed to pay $47 million to purchase 51 percent of a 27-acre parcel of land on the Japanese island.
The company's planned purchase is part of its aggressive strategy to acquire major casinos and hotels around Asia.
The firm, which controls close to half of Macau's VIP gaming industry, aims to diversify its income source given the recent slowdown in the gambling hub's VIP business.
According to the company's filing, the parcel of land is apparently still designated as farmland but the company is working for it to be re-categorized. Suncity plans to build a hotel and resort in the property. The Japanese island is a popular destination for cruise ships and particularly for Chinese tourists.
Macau's VIP gambling business has so far declined by around 14.5 percent this year. This is a drastic shift from the 10 percent growth in revenues last year, which saw the business rake in more than $21 billion.
Operators have stated that increased competition in other countries has caused major players to find other places to gamble, which is why some operators have resorted to focusing on mass-market gamblers.
The Chinese government has also imposed new policies that are forcing operators to transform their businesses and establishments into a more family-friendly tourist destination.
Suncity's founder and Chairman, Alvin Chau, announced back in April that he was going to be providing over $191 million to his own companies for the purpose of major acquisitions in the gambling and hospitality space. Chau is currently one of the richest men in Asia, with a net worth of around $2 billion.
Last year, the company purchased a piece of property in Vietnam, which it plans to develop into a $4 billion casino and resort. The establishment is expected to open in early 2020.
This year, the company made two major investments, namely a $91.5 investment to increase its stake in Russian casino operator Summit Ascent and an undisclosed investment to open a VIP club in Cambodia.
Japan has become particularly attractive to casino operators in Asia following the government's passage of a law that now allowed casinos to operate in the country. Suncity plans to fully take advantage of the policy change, which is why it has bet big on the property in the Okinawa Island chain.
The new law, which was passed in July 2018, has attracted big-name operators around Asia. This includes major operators such as Galaxy Entertainment Group, Las Vegas Sands, Melco, and Genting Berhad. All of the operators plan to open their first facilities sometime before 2025.