The planned HK$12 billion redevelopment of the 38-year-old Lisboa casino hotel in Macau calls for residential apartment towers that could account for up to a third of the project's 2.69 million-3.22 million square foot gross floor area.
SJM Holdings president of joint ventures and business developments Frank McFadden said that at 1 million sq ft, sales of the residential units could net SJM an estimated HK$5 billion to HK$7 billion to offset the construction costs of the project, based on appraisals by property analysts of current valuations in the Macau market.
The residential portion of the Lisboa project 'should enable us to significantly de-lever any debt' and would be 'balanced with everything else', Mr McFadden said.
'You've got one-third on the [casino] podium and one-third on the hotels, so it will be a component but not a dominant component.'
SJM plans to break ground next year and targets completion by the first quarter of 2012.
However, property analysts cautioned that the Lisboa project may encounter the protracted delays in the government approval process that have plagued most large casino and residential projects in the city since a corruption scandal involving former transport and public works secretary Ao Man-long emerged in December 2006.
'Some projects were submitted to the planning authorities at the beginning of this year, but so far have not yet been approved,' said a Macau-based property consultant. 'SJM is unlikely to get the project approved to start construction next year unless it submitted the application a long time ago.'