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Two Cotai grants to be approved
Two of three Cotai land grant applications could be approved within this year, Lands and Public Works Bureau (DSSOPT) director Jaime Carion said on Friday.
The official said three gaming operators have applied to develop resorts in Cotai. However the bureau may only be able to complete and approve two of the three applications by the end of 2012.
Carion stressed that the approval process of these projects was difficult, especially when it comes to the calculation of land premiums, overall construction area and fire safety hazards.
“Fire safety regulations must be followed strictly. There can’t be any loopholes. The gaming operator had some adjustments regarding this, but in the end they made a decision,” he said, quoted by TDM News.
“In terms of the proposal the operators submitted to the government, they have to be do-able technically, architecturally and legally – then we enter the approval process,” Carion explained.
Gaming operators Wynn Macau, Sociedade de Jogos de Macau (SJM) and MGM China have all applied for a land concession in Cotai.
Last September, Wynn announced they had agreed to pay a MOP 1.55 billion premium to get approximately 20.6 hectares of land, located next to City of Dreams resort and the Macau University of Science and Technology campus, but the government moved quickly to clarify that the deal was not yet settled.
In May last year, chairman and chief executive officer of Wynn Resorts, Steve Wynn, told local media the company would start construction of the project as soon as the land was granted. The cost of the new project in Macau is expected to exceed MOP 20 billion and open within four or five year’s time.
Last year MGM China identified a site of approximately 17.8 acres (0.07 square kilometres) in Cotai but did not disclose its location. The site that MGM is eyeing is almost three times smaller than the plot targeted by Wynn.
As for SJM, chief executive officer Ambrose So Shu Fai said last December that the land grant was approved in principle but the operator had not received any detail on the premium payment.
After the concession is complete SJM is set to diversify its business with a bigger investment in non-gaming. The company will invest about USD 2 billion (MOP 16 billion) in its Cotai project.
SJM had applied for a piece of land of some 70,000 square metres located next to Macau Dome.
Concerning the 48 undeveloped plots whose concession contracts have already expired and are at risk of being taken back, Carion said the DSSOPT has already finished studying and analyzing these cases and are currently consulting other legal departments to see if further analysis is needed.
In addition, Carion reiterated that the government would adjust land premiums based on market demand. He added that he’s confident the revised Land Law will be submitted to the Legislative Assembly within 2012.
Lawmakers have regularly complained that the premium paid by concessionaires of public land was too low but the Real Estate Development Association thinks there is no need to adjust current land premiums – at least not before 2013 or 2014.
“If property prices do go down, how will the land premiums be adjusted? Will it be every year?” asked the president of the Real Estate Development Association, Lok Wai Dak.
“I think adjusting land premiums is only part of the strategy to market adjustments,” he said, quoted by TDM News. Lok added that only a new Land Law can maintain a balanced real estate market.
Meanwhile the president of the Association of Property Agents and Realty Developers warned that the special stamp duty is also not a long-term solution for the soaring housing prices.
Ung Choi Kun admitted that the market has cooled down after the government introduced the new measure last June. But the lawmaker believes the market is bound to lag and therefore it won’t have an impact on property prices.
“When public housing can meet the people’s needs and start to stabilise, the SAR government should not use temporary measures like the special stamp duty to curb real estate prices,” he said, quoted by TDM News.
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