China State Construction International (CSCI), a Hong Kong-registered subsidiary of China State Construction Engineering (CSCEC) has teamed up with another mainland investor to acquire a retail project along Macau’s landmark Senado Square for HK$800 million ($102 million). The deal by the world’s largest construction company comes as CSCEC expands its interests in the gambling mecca near Hong Kong.
Macau-based real estate fund manager Sniper Capital announced Tuesday that its shareholders had approved the disposal of the 70,000 square foot (6,500 square metre) retail redevelopment project located near the UNESCO-listed heritage site. The buyers of the central Macau asset are listed as City Universe Limited and Ardent Success Limited, a previous filing to London Stock Exchange by the company’s Macau Property Opportunities Fund shows. City Universe Limited is a wholly-owned subsidiary of CSCI, while Ardent Success Limited’s director Cai Yusheng is a mainland passport holder who is also active in Hong Kong’s real estate market, according to Hong Kong’s Companies Registry.
CSCEC Unit Grabs Central Macau Site From Sniper
CSCI’s new site is just a 10-minute walk from Macau’s famous Ruins of St. Paul’s. Planned as a retail development comprising a diversified mix of international brands, as well as food and beverage establishments, the project design has already been approved by the Macau government.
While the redevelopment was originally scheduled to be completed this year, the site still hosts a run-down four-storey building without signs of redevelopment, according to local media reports. In a statement to the Macau News Agency (MNA), Sniper Capital’s Doris Boo said the company has no information regarding whether CSCI “has the intention to redevelop the site as a shopping mall.”
The sale price of HK$800 million represents a gain of 541 percent for the fund manager, who acquired the site for HK$124.8 million ($15.9 million) in 2007. An announcement by Sniper Capital last month, when the sale agreement was originally revealed, indicated that the sale price represents a 14 percent premium over the property’s valuation of HK$703 million as at 31 December 2017. Sniper’s Macau Opportunities Fund is said to be in the process of winding up and returning cash to investors.
The retail project sale comes as Macau’s retail sector shows signs of growth. Retail sales in the city jumped 16.2 percent in the fourth quarter of last year with smartphone, leather goods and pharmacy, products sought-after by tourists, driving much of the growth.
CSCEC Builds Out Macau Presence
China state-owned CSCEC first entered Macau in 1996 and its first high profile project was the Macau Tower developed by Stanley Ho’s STDM two years later. The construction giant has since built Macau’s biggest resorts including Galaxy, Wynn, City of Dreams and MGM.
CSCEC’s property development subsidiary China Overseas Land & Investment has developed two residential projects in Macau, namely La Cite and The Paragon, which were completed in 2007 and 2014 respectively.
Earlier this week, the state-owned developer reported earnings with a 9.21 percent rise in core profit to $4.37 billion. Its revenue grew a modest 1.2 percent to $21 billion.
Other mainland developers have also been active in Macau recently, with Jiayuan International having purchased a plot on the city’s Taipa island last December for a record HK$3.5 billion — the biggest land sale ever in the former Portuguese colony.