Genting Bhd is expected to exit the Miami real estate market with a sizable profit, more than a decade after purchasing land there to build Resorts World Miami, said Maybank Investment Bank (Maybank IB).
The group's waterfront Miami site is on the market, and it has reportedly received five proposals above US$1 billion for the 6.3ha land.
Genting initially purchased the land in 2011 for US$236 million to develop Resorts World Miami on it.
According to Maybank IB, Genting might earn RM4.4 billion in cash and an RM2.9 billion gain on the sale.
"Recall that Genting had invested US$500 million throughout May and September 2011 to acquire the aforesaid property. Note that the ringgit was trading at only RM3.00:US$1 then versus RM4.43:US$1 currently.
"Assuming the Miami property is sold for US$1 billion (RM4.4 billion), we estimate that Genting could recognise a gain on disposal of RM2.9 billion or RM0.52 a share. Yet, we do not expect Genting to declare special dividends but instead, expect it to fortify its balance sheet as it bids for a lucrative downstate casino license in New York," it said in a note today.
Genting plans to make a final decision in the coming weeks.
The group currently owns and operates Resorts World Genting (RWG), Genting United Kingdom (GENUK), Resorts World New York City (RWNYC), and Resorts World Bimini (RWB).
RWG, a major contributor to Genting's earnings, is expanding via the Genting Integrated Tourism Plan (GITP), involving 1,536 hotel rooms, an outdoor theme park, an indoor theme park, a mall, a plaza, and a new cable car line.