SJM, tomorrow is late

SJM is racing against time to open its first IR on Cotai. It will be the most expensive and the most time-consuming of all. But it promises not to be just one more. Karl Lagerfeld and Versace are brands that can make a difference. 

MB March 2020 Special Report | Cotai 3.0 (2019-2022)

If in some cases analyzed in this special report the operators seem to be coinciding with the start of works with the certainty that they will have a few more years of concession, SJM is at the opposite pole: It wants to open the Grand Lisboa Palace (GLP) as soon as possible, although already no one removes the title of work in the longest Cotai (almost seven years). 

The difference between these buyers and SJM is that they have all opened facilities in Cotai and are now in a supplementary phase. 

SJM will already be the last to open an Integrated Resort, so concentrated were the multiple casinos of the Peninsula in the early years. The works only began in 2014, which means that, for various reasons, SJM waited much more than others to decide to join Cotai. 

This has been a project surrounded by various mishaps, which has contributed to the postponement since 2017 of the opening moment. 

The truth is that, at the time we are producing this text, there is not yet a date. SJM has avoided, in recent months, committing to a particular day. 

The last information came from the group’s CEO, Ambrose So Shu Fai, who indicated last October that the opening would maybe take place in the second half of 2020, at least “partially.” However, last September, analysts at Morgan Stanley indicated that they estimate the opening will be delayed to January, 2021. 

The delays not only have a direct impact on SJM’s revenue, ‘limited’ to the 22 casinos on the Peninsula, with a global market share of just over 30 per cent. 

Also the construction costs have been increased. Last year, SJM announced that the project will cost HK$39 billion (MP40 billion). “We would not be shocked if delays get extended further and the final budget goes higher [than HK$39 billion],” stated the brokerage house Bernstein. It will be the most expensive of all IRs in Cotai. 

“We will have new hotels and other services that can attract more tourists; also renowned restaurants. I believe it will give a good image to Macau. We can’t repeat what already exists in Cotai. We will be the last and we will try to bring new offerings,” the Co-chairmen and Executive Director of SJM Holdings, Angela Leong On Kei, promised one year ago. 

GLP will include 1,900 hotel rooms and suites divided among three hotels, space for meetings and conferences, restaurants, entertainment space, and a casino floor able to accommodate up to 700 tables and 1,200 slot machines. Other features will include a Wedding Pavilion for celebrations and events or a wellness facility, purportedly consisting of three outdoor and three indoor swimming pools, three gyms, and three spas. About 90 per cent of the floor space (70,468 square meters of land) will be dedicated to non-gaming facilities and retail brand New Yaohan will manage around one-third of all retail space. 

Of the three hotels to open, the highlight will be the signature of Karl Lagerfeld, the first that the fashion designer has authorized and will not see, as he passed away last year. The Karl Lagerfeld-branded hotel will have up to 270 guestrooms and suites in a “20-storey exclusive tower.” 

The other two hotels in the LPG will be designated Grand Lisboa Palace Hotel (around 1,400 rooms) and Palazzo Versace Macau (approximate 290 rooms), named after the late Italian designer Gianni Versace and under the creative direction of the world-renowned designer Donatella Versace. “Housed in a 20-storey exclusive tower with a built-up area of over 34,000 square meters, Palazzo Versace Macau will be the first luxury five-star hotel in Macau to be designed by one of the world’s leading fashion houses, and the first Palazzo Versace in Asia,” SJM said in 2013.