Chinese property developer Landing International is diversifying the large-scale investment position it has taken in South Korean gaming with a smaller plan involving the purchase of a 16-table venue in a more remote area of the country.
Landing, which is partnering with two listed companies of the Genting Group on resort casinos on the popular island of Jeju, says it is will spend US$112 million to acquire the Alpensia Casino at the Holiday Inn in Pyeongchang in the northeast of the country and the town selected to host the 2018 Winter Olympics.
The Alpensia is known for its ski trails and other outdoor attractions, and Landing said it considers the acquisition “a valuable opportunity for the group to broaden its market share in the casino industry in Korea and to diversify its investments from Jeju Island to Gangwon-do Province.”
Gangwon-do also hosts the only casino in the country open to Korean nationals, Kangwon Land, which also is the largest and most lucrative gambling venue in the country.
Landing said it plans to expand the Alpensia, one of the country’s 16 casinos open only to foreigners, to 70 tables. The venue also houses 42 machine games.
Landing has formed a 50-50 joint venture with Genting Hong Kong to acquire an existing casino inside the Hyatt Regency Jeju for an investment of $117.2 million. One of eight licensees in Jeju, the venue is under renovation and is expected to reopen in January with around 30 gaming tables and 16 slot machines.
The company also is teaming up with Genting Singapore to try to win approval from the local government for a much larger greenfield development on the island that envisions an array of gaming, hotel and leisure attractions complemented by a residential component and possibly facilities to accommodate well-heeled medical tourists. The resort is eyeing a Q2 2015 groundbreaking with construction to continue in phases over several years at a final price tag of US$2.2 billion.
The South Korean government is actively courting tourists from China, already the major contributors to the country’s gambling revenues, to boost the economy. Chinese passport holders enjoy visa-free access to Jeju, and the government recently expanded the policy to Yangyang International Airport in Gangwon-do, which is served by charter flights chartered flights from 12 cities in China, including Beijing, Shanghai and Guangzhou.
“It is believed that the group can leverage on the prime location of the Alpensia and the enormous marketing opportunity from the 2018 Pyeongchang Winter Olympics and raise the operation efficiency and profitability of the casino business,” Landing said. “The acquisition (if completed) will increase the group’s market shares and branding in the Korean casino industry, which will foster a positive synergistic effect on the other businesses of the group in Korea.”
