FARMING product distributor Calata Corp. has teamed up with American firms Sino-America Gaming Investment Group LLC (Sino-America) and Macau Resources Group Ltd. (MRG) to create a real estate and investment trust (REIT) for a proposed P65-billion integrated resort in Mactan, Cebu.
The integrated estate, to be called “Mactan Leisure City,” will rise on a 14-hectare property in Mactan Island, Cebu and feature three hotels, casino and entertainment complex, commercial, retail, conference facilities and a yacht club, Calata told the Philippine Stock Exchange on Tuesday.
Shares of Calata surged by 28.16 percent to close at a 52-week high of P3.55 per share on Tuesday after the announcement of the deal with MRG and Sino-America Gaming, which have been scouting for opportunities to enter the Philippines’ gaming industry since last year.
The Mactan integrated resort, which is expected to start commercial operations in 2020, is envisioned to be a “world class development” with an aspiration to be a host to Southeast Asia’s first seven-star hotel.
Calata said this estate would be the home of celebrity-branded themes including Sir Elton John, Shaquille O’Neal and other licensed brands and incorporate a variety of state-of-the-art entertainment and family leisure concepts.
Mactan Leisure City, the company said, would “become a game-changer in the region’s family leisure tourism and gaming offering where tourists from all parts of the world will converge to experience luxurious resort life in a tropical paradise while enjoying a variety of family entertainment experiences.”
Furthermore, the project is seen to generate tens of thousands of employment opportunities and projected to generate gross annual revenue of around P55.74 million.
The Macau Group and Sino-America will initially infuse P836 million into the project, of which P234 million will go to Calata, which in turn will be invested in its majority-owned corporate vehicle The remaining P602.1 million will be directly invested in Calata’s majority-owned corporate vehicle.
The REIT structure gives investors the option to invest directly in the finished products that are already earning money – such as residential and office units, hotels or shopping malls or even infrastructure ventures like toll roads and power plants – and not just the property developer itself. This was meant to attract investors because the Philippine REIT law of 2009 requires the distribution of 90 percent of income annually.
“The Mactan Leisure City shall only be one of the numerous projects which Calata Corp. and its partners shall be handling,” the disclosure said, adding that the partnership would also pursue agriculture projects.
With the additional business opportunity created from this partnership, Calata said it expects that additional revenues to be generated would “substantially and significantly take corporate and shareholder value to the next level.”