Las Vegas Sands Corp (LVS) has announced an ambitious plan to invest $8 billion in the second phase of its Marina Bay Sands (MBS) complex, adding a fourth tower to the property and significantly increasing its original investment estimate of $3.3 billion from 2019.
The new phase, referred to as “MBS IR2” (Integrated Resort 2), will feature a fourth tower with over 570 hotel rooms, expanded casino space, a 15,000-seat arena, a sky roof, and approximately 110,000 square feet dedicated to meetings and exhibitions.
Investment in the project, which was initially announced in April 2019 at the cost of $3.3 billion, has since more than doubled to $8 billion, LVS said in its third-quarter earnings presentation on October 23rd.
Speaking in a conference call to discuss the group’s most recent financial report, Patrick Dumont, President and Chief Operating Officer of LVS, expressed his enthusiasm about the long-term prospects of investing in Singapore’s tourism sector.
“We aim to continue adding value to Singapore and remain a strong partner with the government to achieve necessary tourism goals…Our goal with this tower is to make it something very different, he added.”
This is going to be the most important gaming and hospitality building in the world. It’s going to be the best hotel in the world”
Patrick Dumont, LVS
Dumont highlighted that LVS wanted to create “something extraordinary that addresses the Singapore market”, with most of the gaming group’s highest-end products going to the city-state over the last 14 years.
“We feel this project will be very accretive to our overall portfolio and create substantial value for us in the long term”, he added.
This expansion includes approximately $4.7 billion for design and construction, $2 billion for land premiums, and $1.3 billion for pre-opening and finance costs.
MBS’ net revenue declined 9.5 percent to $919 million for the third quarter that ended in September, while its adjusted property earnings before interest, taxes, depreciation, and amortization (EBITDA) fell 17.3 percent to $406 million.
LVS said it is “investing in the growth of Singapore’s high-value leisure and business tourism market” with the expansion establishing a “new ultra-luxury resort destination” that will enhance Singapore’s tourism appeal.
The gaming group expects to shoulder between 25 percent and 35 percent of the project cost directly, with the remaining 65 percent to 75 percent to be covered through project financing.
Construction of MBS’ fourth tower is scheduled to commence in June 2025 and is expected to be completed by June 2030, with an estimated official opening in January 2031.
Dumont emphasized the progress made on the ongoing $1.75 billion refurbishment program at MBS, which has entered its initial stages.
He also highlighted the strong financial performance of MBS, reporting an EBITDA of $406 million, pointing out that if the company had maintained its expected rolling play, EBITDA could have been approximately $78 million higher.
“These results underscore the impact of high-quality tourism investments and growth in high-value tourism in Singapore”, he noted.
“The company looks forward to realizing the full benefits of its expanded offerings, which will include a diverse suite of amenities aimed at attracting a high-value clientele”.
