Macau casino and entertainment operator Melco International Development is making its first foray into the Greater Bay Area’s Zhongshan and plans to build one of the city’s biggest mixed-use development with mainland Chinese developer Agile Group Holdings.
The pair have won a mega site four times the size of Hong Kong’s Victoria Park for 4 billion yuan (US$515 million), according to a filing made by Melco with the Hong Kong stock exchange on Wednesday.
“Over the past 15 years, Melco has been creating, developing and operating world-class entertainment facilities in Macau and globally. We are determined to play an active role in the development of the Greater Bay Area, and to leverage the incredible expertise of the group in non-gaming activities,” said Lawrence Ho Yau-lung, Melco’s group chairman and CEO.
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The casino operator is joining companies flocking to the Greater Bay Area development zone, which is being boosted by policies aimed at making it a centre of finance and innovation in China. Melco is also stepping up its non-gaming investments at a time when its core business has suffered because of the coronavirus pandemic. Last year, it reported a loss of HK$12.38 billion following temporary casino closures and a significant decline in tourism.
Melco believes the development zone will be a gateway for global tourism into China, and it will continue to explore opportunities for investment and to leverage its “deep expertise in entertainment and hospitality to contribute to the Greater Bay Area development”, the company said.
“It is a good tactic. The proposed project will supplement Melco’s entertainment business in Macau,” said Alva To, vice-president Greater China, head of consulting, at property consultancy Cushman & Wakefield.
The site could yield a gross floor area of 750,000 square metres and the project will include residential complexes, office areas, hotels, service flats, wellness centres, malls and a theme park. Melco said it expects that most of the project, including the theme park, will be completed by 2025.
The project is also close to the Shenzhen-Zhongshan Bridge, which will cut travel times between the two cities to less than 30 minutes from 1 hour and 40 minutes currently. The bridge is expected to be completed in 2024.
Total investment in the project, including land costs, could reach 10 billion yuan, according to sources familiar with project. It will not include a casino, as gambling remains illegal in China, the source said. It is also the company’s first large-scale cultural and entertainment project in China outside Macau.
Melco operates its gaming businesses primarily through Melco Resorts, a developer, owner and operator of integrated resort facilities in Asia and Europe in which it holds a 55.8 per cent stake. Melco Resorts currently operates Altira Macau, an integrated resort located in Taipa, City of Dreams, an integrated resort located in Cotai, and Mocha Clubs, the largest non-casino based operator of electronic gaming machines in Macau. It also has majority ownership of and operates Studio City, a cinema-themed integrated resort in Cotai.
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