Improved earnings at its Darwin casino has seen SkyCity Entertainment Group boost its profit forecasts for the last financial year.
Shares in the trans-Tasman company rose more than 7 per cent, up 16c to $2.46, as SkyCity upgraded its profit estimate to be between $113 million and $116 million for the year to June 30, up from $99 million to $106 million the previous year.
The company pointed to improved earnings at Darwin's Mindil Beach casino, Adelaide and Auckland for the rosy forecast.
Earnings are subject to an external audit with the full annual profit result due out on August 26.
"It has been a very pleasing fourth quarter and second half, with our operations in New Zealand and Australia performing above expectations," chief executive officer Nigel Morrison said in a statement sent to the stock exchange yesterday.
The Darwin Casino recently underwent a major redevelopment of its gaming room floor.
It also added a new upmarket restaurant - Il Piatto - and the popular Sandbar.
Mr Morrison said the Adelaide Casino was also a key performer underpinning improved results.
"It was coming off a very low base but we're very pleased with Adelaide's performance," he said.
"We're very pleased we kept Adelaide and we think it's got great potential."
The company expects its underlying and reported earnings, (EBITDA) for the 2009 year to be approximately $300 million.
SkyCity will update shareholders and investors with details of its 2009 result on August 26.
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Thursday, July 30, 2009
Monday, July 27, 2009
Google sparks real estate listings brawl, by Julian Lee - The Sydney Morning Herald - 27th July 2009
Google is facing the greatest challenge yet to its might in Australia as two of its largest media customers threaten to pull their business over the internet company's decision to enter the real estate listings market.
Fairfax Media and News Limited are independently weighing up whether to pull the millions of dollars they collectively spend on buying key search terms on Google following the latter's decision to list properties for sale on Google Maps.
Domain, which is owned by Fairfax, and Realestate.com.au, which is controlled by News, dominate the market for properties being searched for on the internet and the $144 million of classified advertising revenue that goes with it.
What had been a symbiotic relationship between Google and its media partners in Australia has been showing signs of strain.
In April News Corporation's chairman, Rupert Murdoch, fired the first shot, accusing Google of not paying the media for content that it was using to aggregate and sell ads against.
Google began sourcing listings from real estate aggregators such as Homehound and My Home this month and opened up the service to allow real estate agents to list their properties free on Google Maps.
Greg Ellis, the chief executive of REA Group - which operates realestate.com.au - welcomed competition in the marketplace but added: "It will be interesting to see how Google reconciles its ability to encourage companies to purchase Adwords, buy Google Maps and DoubleClick services and then compete with those companies who currently or intend to buy these services.
"It's a discussion that should occur across the Australian internet landscape, not just within REA. We are reviewing our options. No decision has yet been made."
Lloyd Whish-Wilson, the head of Fairfax's NSW metropolitan publishing, which includes Domain's online and print properties, and the publisher of the Herald, released a short statement. "We are looking at our options at the moment. We are obviously not keen to support a would-be competitor with our revenue," it said.
At stake is a market that grew 38 per cent last year and that the analyst Frost & Sullivan forecasts will grow 23 per cent this year.
Nielsen reckons nearly half a million people a day visit property websites, with realestate and Domain accounting for nearly 90 per cent of that traffic.
But almost a third of their traffic comes via Google, Hitwise reports, which raises the question of who needs whom more? Google has 92 per cent of the search advertising market and this year is expected to book revenues close to $1 billion.
Simon Baker, chief executive of the online classified marketing specialist Classified Ad Ventures, said Google would struggle to get more than half the agents listing their properties on Google Maps. It would also find it difficult to ensure that listings were up to date and free of scammers who might target Australian property hunters with bogus listings.
Mr Baker, a former chief executive of REA, said Google might be shooting itself in the foot. Its real estate service risks undermining its core business model, which relies on selling advertising against internet search queries.
"Google is moving from being a search engine to a portal," he said. "Instead of sending you to other websites - which have paid money to be there on its listings - it is now serving up the end data itself. That then raises the question: why would you need to go to the other sites and why would they then pay Google money [for search key words].
"Google has opened up a Pandora's box of questions."
A spokeswoman for Google, Lucinda Barlow, said it had received "great feedback" about its site to date and would like to work more closely with Fairfax and REA to take its listings - which both groups are refusing to do.
"We are partners and we would like to discuss this [issue]," she said. (Credit: The Sydney Morning Herald)
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Fairfax Media and News Limited are independently weighing up whether to pull the millions of dollars they collectively spend on buying key search terms on Google following the latter's decision to list properties for sale on Google Maps.
Domain, which is owned by Fairfax, and Realestate.com.au, which is controlled by News, dominate the market for properties being searched for on the internet and the $144 million of classified advertising revenue that goes with it.
What had been a symbiotic relationship between Google and its media partners in Australia has been showing signs of strain.
In April News Corporation's chairman, Rupert Murdoch, fired the first shot, accusing Google of not paying the media for content that it was using to aggregate and sell ads against.
Google began sourcing listings from real estate aggregators such as Homehound and My Home this month and opened up the service to allow real estate agents to list their properties free on Google Maps.
Greg Ellis, the chief executive of REA Group - which operates realestate.com.au - welcomed competition in the marketplace but added: "It will be interesting to see how Google reconciles its ability to encourage companies to purchase Adwords, buy Google Maps and DoubleClick services and then compete with those companies who currently or intend to buy these services.
"It's a discussion that should occur across the Australian internet landscape, not just within REA. We are reviewing our options. No decision has yet been made."
Lloyd Whish-Wilson, the head of Fairfax's NSW metropolitan publishing, which includes Domain's online and print properties, and the publisher of the Herald, released a short statement. "We are looking at our options at the moment. We are obviously not keen to support a would-be competitor with our revenue," it said.
At stake is a market that grew 38 per cent last year and that the analyst Frost & Sullivan forecasts will grow 23 per cent this year.
Nielsen reckons nearly half a million people a day visit property websites, with realestate and Domain accounting for nearly 90 per cent of that traffic.
But almost a third of their traffic comes via Google, Hitwise reports, which raises the question of who needs whom more? Google has 92 per cent of the search advertising market and this year is expected to book revenues close to $1 billion.
Simon Baker, chief executive of the online classified marketing specialist Classified Ad Ventures, said Google would struggle to get more than half the agents listing their properties on Google Maps. It would also find it difficult to ensure that listings were up to date and free of scammers who might target Australian property hunters with bogus listings.
Mr Baker, a former chief executive of REA, said Google might be shooting itself in the foot. Its real estate service risks undermining its core business model, which relies on selling advertising against internet search queries.
"Google is moving from being a search engine to a portal," he said. "Instead of sending you to other websites - which have paid money to be there on its listings - it is now serving up the end data itself. That then raises the question: why would you need to go to the other sites and why would they then pay Google money [for search key words].
"Google has opened up a Pandora's box of questions."
A spokeswoman for Google, Lucinda Barlow, said it had received "great feedback" about its site to date and would like to work more closely with Fairfax and REA to take its listings - which both groups are refusing to do.
"We are partners and we would like to discuss this [issue]," she said. (Credit: The Sydney Morning Herald)
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Friday, July 24, 2009
Ravesi’s awarded National AHA “2009 Best Bar Presentation and Service (Metro)”
23rd July 2009
A year after their win for Hotel Bar of the Year in 2008, A-List Party Playground Ravesi’s has won Best Bar Presentation and Service (Metro) in 2009, by the Australian Hotels Association (AHA) – at the National Awards for Excellence held Friday night, 17 July 2009.
Won jointly with The Langham, Aria Bar and Lounge in Melbourne, Ravesi’s is located at the heart of Sydney’s most alluring stretch of sand; home to Bondi’s beautiful people, fresh from the surf locals, and curious guests from across Australia and the world. Fusing together Sydney’s most famous beachside bar with stylish accommodation, casually elegant dining, and glamorous nightlife; in a seductively Sydney combination unique to Bondi’s hottest Hotel.
Ravesi’s General Manager Troy Graham, a local Bondi boy from way back, is thrilled with the win. “It’s fantastic to be recognised by the industry for the second time - especially in a national capacity.”
“Ravesi’s iconic beachside elegance and our management and staff’s attention to every detail makes Ravesi’s the perfect place to enjoy Sydney’s most incredible beachside views; backed of course, by a brilliant team of top-line hospitality professionals dedicated to the very best in service and standards. Ravesi’s has been committed to ensuring guests enjoy the very best Sydney has to offer.” he says.
A delight in any season, Ravesi’s offers an alluring winter respite, with deliciously cosy wines to warm, world-class cocktails and premium spirits. From glorious summer days to glittering and glamorous winter nights Ravesi’s casually elegant surrounds combine Bondi’s beachside cool with Sydney’s shimmering nights. A place where Bondi’s locals, A-listers, and celebrities can and do play on; Ravesi’s is at the center of Bondi’s alluring life, from day and well into the night.
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A year after their win for Hotel Bar of the Year in 2008, A-List Party Playground Ravesi’s has won Best Bar Presentation and Service (Metro) in 2009, by the Australian Hotels Association (AHA) – at the National Awards for Excellence held Friday night, 17 July 2009.
Won jointly with The Langham, Aria Bar and Lounge in Melbourne, Ravesi’s is located at the heart of Sydney’s most alluring stretch of sand; home to Bondi’s beautiful people, fresh from the surf locals, and curious guests from across Australia and the world. Fusing together Sydney’s most famous beachside bar with stylish accommodation, casually elegant dining, and glamorous nightlife; in a seductively Sydney combination unique to Bondi’s hottest Hotel.
Ravesi’s General Manager Troy Graham, a local Bondi boy from way back, is thrilled with the win. “It’s fantastic to be recognised by the industry for the second time - especially in a national capacity.”
“Ravesi’s iconic beachside elegance and our management and staff’s attention to every detail makes Ravesi’s the perfect place to enjoy Sydney’s most incredible beachside views; backed of course, by a brilliant team of top-line hospitality professionals dedicated to the very best in service and standards. Ravesi’s has been committed to ensuring guests enjoy the very best Sydney has to offer.” he says.
A delight in any season, Ravesi’s offers an alluring winter respite, with deliciously cosy wines to warm, world-class cocktails and premium spirits. From glorious summer days to glittering and glamorous winter nights Ravesi’s casually elegant surrounds combine Bondi’s beachside cool with Sydney’s shimmering nights. A place where Bondi’s locals, A-listers, and celebrities can and do play on; Ravesi’s is at the center of Bondi’s alluring life, from day and well into the night.
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Wednesday, July 15, 2009
Sunday, July 05, 2009
Rooms for high-rollers, by Bruce Elder - The Sydney Morning Herald - 4th July 2009
Bruce Elder finds the casino's apartments are large, impressive and pricey.
Star City, Saturday night: is it, as some would have it, Sydney's 21st-century answer to William Hogarth's Gin Lane? Certainly, the whole place glows with the gaudy, luminous power of a thousand poker machines and the glassy-eyed punters are driven by the siren call of Lady Luck.
Groups of young women teeter on impossible heels at tables where dice are thrown and cards are dealt. Young men, all tats and gel, move in packs and, hunched over the machines, serious gamblers press buttons and dream of jackpots.
For a unique view of a sliver of humanity and the city's only legal casino, a night at Star City is worthwhile. Sure, you can take in a musical at the Lyric Theatre, wander across to Darling Harbour, enjoy the best of Chinatown or, with a little extra effort, make your way to the Opera House and Circular Quay. But for action and fascination, the casino is a magnet on a Saturday night. Sydney at play. Sydney trying to break the economic cycle and win a fortune. Sydney as the gleaming Emerald City.
But brace yourself for some of the highest hotel and apartment rates in Sydney.
Star City has two accommodation options: the apartment section and the hotel section. And, if you want to engage in nuances, it also has a new super-whammy section with spa baths and televisions to watch while you bubble away.
If you stay in the hotel section, which is at the western side of the complex, you can check in at reception and never have to venture anywhere near the gaming tables.
If you opt to stay in the apartment section, you will walk past the gaming area and can, if you are prepared to pay a little extra, get a view to the city skyline.
We book what is described as the "Superior City BB" with a room description promising "city skyline views". We end up gazing over Ultimo and Glebe.
None of these accommodation options are cheap. According to wotif.com, the full rate for Star City rooms ranges from $580 for a Superior Pyrmont BB (which, I guess, is where we end up) to $990 for the Star Suite Escape.
Fortunately, with the website's help, I find that at the time I book, those $580 rooms can be secured for $265 during the week and $365 on a Saturday night. And a Superior City BB, which has a full rate of $610, can be had for $285 during the week and $385 on Saturdays. The new Star City Suite (full rate $990) drops to $595 during the week and is available for $745 on Saturday night.
So what do we get for $385 or, if you want to impress your friends, "What did we get when we stayed in a $610 room last Saturday night?"
The view from Room 956 is not of the city skyline but from our large balcony we can sit and watch the sun set over Anzac Bridge. The two-bedroom apartment is huge (and so are the two flat-screen televisions) and dressed in the popular decorator colours of stone and chocolate. The beds are comfortable: a king size in the main bedroom, a queen in the second bedroom.
The kitchen is designed for a stay-in evening, with a full-sized fridge, stove, microwave and decent-sized dining table. And there is a big laundry with washing, drying and ironing facilities.
Breakfast is included in the tariff but, for an extra $10 a person, we ascend from the Garden Buffet with its bain maries and hundreds of patrons to the more rarefied ambience of the Astral Restaurant on the 17th floor. It has tablecloths, which is what everyone needs for breakfast, and superb city views. On the menu is an excellent mix of bain marie and freshly cooked items and Toby's coffee. And the 24-hour valet parking for $26 adds a high-life indolence to the experience.
We had planned to indulge in the new Star Suites, part of the hotel's recent upgrade, but at $990 full rate (or $745 on Saturday night and even $595 midweek on wotif.com), the suites are beyond Traveller's budget.
Even so, we're impressed by the quality of Star City's as yet unrefurbished hotel and apartments, which are ideal places to stay if you want to give your spare cash to a croupier or enjoy a musical.
Weekends Away are reviewed anonymously and paid for by Traveller.
VISITORS' BOOK
Star City
Address 80 Pyrmont Street, Pyrmont.
The verdict A large and comfortable hotel and apartment complex close to the city centre and ideal for those planning to enjoy the Star City facilities.
Price Rooms from $580-$990 a night but wotif.com has deals as low as $199 midweek to $745 for a suite on Saturday night. Our two-bedroom apartment was $385 on a Saturday night.
Bookings Phone 1800 700 700, see starcity.com.au.
Getting there Close to public transport, at the north-western end of Darling Harbour.
Wheelchair access Yes.
While you're there Visit the excellent Maritime and Powerhouse museums and enjoy the attractions of Darling Harbour. (Credit: The Sydney Morning Herald)
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Star City, Saturday night: is it, as some would have it, Sydney's 21st-century answer to William Hogarth's Gin Lane? Certainly, the whole place glows with the gaudy, luminous power of a thousand poker machines and the glassy-eyed punters are driven by the siren call of Lady Luck.
Groups of young women teeter on impossible heels at tables where dice are thrown and cards are dealt. Young men, all tats and gel, move in packs and, hunched over the machines, serious gamblers press buttons and dream of jackpots.
For a unique view of a sliver of humanity and the city's only legal casino, a night at Star City is worthwhile. Sure, you can take in a musical at the Lyric Theatre, wander across to Darling Harbour, enjoy the best of Chinatown or, with a little extra effort, make your way to the Opera House and Circular Quay. But for action and fascination, the casino is a magnet on a Saturday night. Sydney at play. Sydney trying to break the economic cycle and win a fortune. Sydney as the gleaming Emerald City.
But brace yourself for some of the highest hotel and apartment rates in Sydney.
Star City has two accommodation options: the apartment section and the hotel section. And, if you want to engage in nuances, it also has a new super-whammy section with spa baths and televisions to watch while you bubble away.
If you stay in the hotel section, which is at the western side of the complex, you can check in at reception and never have to venture anywhere near the gaming tables.
If you opt to stay in the apartment section, you will walk past the gaming area and can, if you are prepared to pay a little extra, get a view to the city skyline.
We book what is described as the "Superior City BB" with a room description promising "city skyline views". We end up gazing over Ultimo and Glebe.
None of these accommodation options are cheap. According to wotif.com, the full rate for Star City rooms ranges from $580 for a Superior Pyrmont BB (which, I guess, is where we end up) to $990 for the Star Suite Escape.
Fortunately, with the website's help, I find that at the time I book, those $580 rooms can be secured for $265 during the week and $365 on a Saturday night. And a Superior City BB, which has a full rate of $610, can be had for $285 during the week and $385 on Saturdays. The new Star City Suite (full rate $990) drops to $595 during the week and is available for $745 on Saturday night.
So what do we get for $385 or, if you want to impress your friends, "What did we get when we stayed in a $610 room last Saturday night?"
The view from Room 956 is not of the city skyline but from our large balcony we can sit and watch the sun set over Anzac Bridge. The two-bedroom apartment is huge (and so are the two flat-screen televisions) and dressed in the popular decorator colours of stone and chocolate. The beds are comfortable: a king size in the main bedroom, a queen in the second bedroom.
The kitchen is designed for a stay-in evening, with a full-sized fridge, stove, microwave and decent-sized dining table. And there is a big laundry with washing, drying and ironing facilities.
Breakfast is included in the tariff but, for an extra $10 a person, we ascend from the Garden Buffet with its bain maries and hundreds of patrons to the more rarefied ambience of the Astral Restaurant on the 17th floor. It has tablecloths, which is what everyone needs for breakfast, and superb city views. On the menu is an excellent mix of bain marie and freshly cooked items and Toby's coffee. And the 24-hour valet parking for $26 adds a high-life indolence to the experience.
We had planned to indulge in the new Star Suites, part of the hotel's recent upgrade, but at $990 full rate (or $745 on Saturday night and even $595 midweek on wotif.com), the suites are beyond Traveller's budget.
Even so, we're impressed by the quality of Star City's as yet unrefurbished hotel and apartments, which are ideal places to stay if you want to give your spare cash to a croupier or enjoy a musical.
Weekends Away are reviewed anonymously and paid for by Traveller.
VISITORS' BOOK
Star City
Address 80 Pyrmont Street, Pyrmont.
The verdict A large and comfortable hotel and apartment complex close to the city centre and ideal for those planning to enjoy the Star City facilities.
Price Rooms from $580-$990 a night but wotif.com has deals as low as $199 midweek to $745 for a suite on Saturday night. Our two-bedroom apartment was $385 on a Saturday night.
Bookings Phone 1800 700 700, see starcity.com.au.
Getting there Close to public transport, at the north-western end of Darling Harbour.
Wheelchair access Yes.
While you're there Visit the excellent Maritime and Powerhouse museums and enjoy the attractions of Darling Harbour. (Credit: The Sydney Morning Herald)
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High-rollers fail to pitch at City of Dreams, by Vanda Carson - The Sydney Morning Herald - 4th July 2009
The City of Dreams, James Packer's latest Macau casino, has disappointed the market in its first month of trading with its lack of VIP and mass-market gamblers and its lower than expected market share.
Melco Crown Entertainment, the joint-venture company between Mr Packer's Crown and Lawrence Ho's Melco, said yesterday that rolling chip volume was $US1.94 billion ($2.4 million) in June. Rolling chip turnover is a key measure of casino profitability. It measures the number and value of chips gambled by VIPs, who are the City of Dreams's most valued and desired customers.
Shares in Melco Crown, which trade on Nasdaq, fell 3 per cent on the news on Thursday US time to close at $US4.55.
Before it opened last month, Mr Ho conceded there was a lot riding on the success of the project. He told Bloomberg it was "crucial" that the casino defied the global recession and had a successful opening.
"We know the pressure is on us," Mr Ho said. "The success of it will have major implications."
The casino is opening in the midst of both the worst global slump since World War II and as the Chinese Government tightens restrictions on the number of visits its citizens can make.
The Chinese enclave's gaming revenues have been hampered by soft economic conditions, a tighter credit environment and travel restrictions.
Across the whole of Macau revenues in June were 17 per cent lower than a year ago. Revenues also fell in May, when they dropped by 10 per cent.
The City of Dreams figures released yesterday also implied the casino had only grabbed an estimated 7 per cent share of the Macau market, below initial expectations of at least 10 per cent, and analyst consensus expectations of 14 per cent.
However, having only traded for a month, it is still too early to tell whether it will be a success.
Melco Crown Entertainment also owns a second casino in Macau, the Altira, which has a market share of about 8 per cent. Together the two casinos have about 15 per cent of the market.
Analysts are expecting the City of Dreams to post pretax earnings of $US300 million in the first year, less than the $US500 million a year its neighbouring casino, the Venetian, has been generating.
Yesterday the company emphasised that the trend of chip turnover throughout the month across its 127 VIP tables was positive and volumes were improving, with the casino taking 38 per cent of revenues in VIP tables in the final week of June.
The casino also makes money from gamblers who bet smaller amounts than high rollers.
These gamblers dropped about $US100 million on the City of Dreams's 376 mass market tables in June, which equates to about $1400 to $1600 daily net win per table. This is below the industry average of $US3000 per table. (Credit: The Sydney Morning Herald)
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Melco Crown Entertainment, the joint-venture company between Mr Packer's Crown and Lawrence Ho's Melco, said yesterday that rolling chip volume was $US1.94 billion ($2.4 million) in June. Rolling chip turnover is a key measure of casino profitability. It measures the number and value of chips gambled by VIPs, who are the City of Dreams's most valued and desired customers.
Shares in Melco Crown, which trade on Nasdaq, fell 3 per cent on the news on Thursday US time to close at $US4.55.
Before it opened last month, Mr Ho conceded there was a lot riding on the success of the project. He told Bloomberg it was "crucial" that the casino defied the global recession and had a successful opening.
"We know the pressure is on us," Mr Ho said. "The success of it will have major implications."
The casino is opening in the midst of both the worst global slump since World War II and as the Chinese Government tightens restrictions on the number of visits its citizens can make.
The Chinese enclave's gaming revenues have been hampered by soft economic conditions, a tighter credit environment and travel restrictions.
Across the whole of Macau revenues in June were 17 per cent lower than a year ago. Revenues also fell in May, when they dropped by 10 per cent.
The City of Dreams figures released yesterday also implied the casino had only grabbed an estimated 7 per cent share of the Macau market, below initial expectations of at least 10 per cent, and analyst consensus expectations of 14 per cent.
However, having only traded for a month, it is still too early to tell whether it will be a success.
Melco Crown Entertainment also owns a second casino in Macau, the Altira, which has a market share of about 8 per cent. Together the two casinos have about 15 per cent of the market.
Analysts are expecting the City of Dreams to post pretax earnings of $US300 million in the first year, less than the $US500 million a year its neighbouring casino, the Venetian, has been generating.
Yesterday the company emphasised that the trend of chip turnover throughout the month across its 127 VIP tables was positive and volumes were improving, with the casino taking 38 per cent of revenues in VIP tables in the final week of June.
The casino also makes money from gamblers who bet smaller amounts than high rollers.
These gamblers dropped about $US100 million on the City of Dreams's 376 mass market tables in June, which equates to about $1400 to $1600 daily net win per table. This is below the industry average of $US3000 per table. (Credit: The Sydney Morning Herald)
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Thursday, June 25, 2009
Pubs prove attractive to investors, by Natalie Craig - The Age - 25th June 2009
Three Melbourne pubs leased to a Woolworths-backed company have been sold for more than $16 million in heated auctions at Crown Casino.
The Elsternwick Hotel in Elwood, the Rose Shamrock & Thistle in Reservoir and the Rifle Club Hotel in Williamstown sold separately to three wealthy individuals - one from Sydney and two from Melbourne.
Agents say the buyers were attracted by the "blue-chip" tenant, Australian Leisure & Hospitality Group, in which Woolworths has a 75 per cent stake. Melbourne publican Bruce Mathieson owns the remainder.
The pubs sold on investment yields as low as 5 per cent, prompting agents to speculate that private buyers, disgruntled by sharemarket and banking returns, are now prepared to pay more for pubs - relative to their rental income - than in previous months.
Vendor ALE Property Group, Australia's largest listed pub owner, reaped a 24 per cent premium on the pubs' book values at December 31.
ALE managing director Andrew Wilkinson said it was a "particularly strong" result in a "difficult market".
He said the sale last week of two of its Sydney pubs for $12 million - slightly more than book value - fuelled interest in the Melbourne sales. "Sydney set a benchmark and in the past week investors have been digesting that and knew that they'd have to turn up in Melbourne with a very sharp price."
The sales by ALE come as rival pub owners are expected to start flooding the market with sales. About 200 pubs in NSW are believed to be in breach of their lending covenants, with banks already pulling the plug on owners such as Winners Circle Group.
In Melbourne, the Cornerstone group needs to sell several of its assets after appointing administrators to deal with debts racked up during a buying frenzy at the top of the market in 2007.
ALE told the stock exchange it would "apply the proceeds of the sale to both debt reduction and to increase surplus cash balances". Mr Wilkinson said ALE was not a forced seller, and "at this stage" had no more plans to sell.
"We've got no refinancing coming for another two years, at least. From our point of view, our finances are in good shape … In this market, people are gravitating towards lower-risk, long-term, good-quality properties."
Agents were happy with the auction turnout but were reluctant to call a widespread recovery in pub sales, emphasising instead the rarity of what was on offer.
Scott Callow and Joel Fisher, of CBRE Hotels, jointly marketed the hotel portfolio with Raoul Holderhead and Dean Venturato of Burgess Rawson.
"The strength in the hotel investment market has been proven by this result … a number of private parties were bidding feverishly," Mr Callow said. "Quality assets are continuing to attract strong interest, given the lack of prime hotels available in the current market."
Each pub sold with 19-year leases to ALH, indexed to inflation, with options to renew for four 10-year terms. (Credit: The Age)
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The Elsternwick Hotel in Elwood, the Rose Shamrock & Thistle in Reservoir and the Rifle Club Hotel in Williamstown sold separately to three wealthy individuals - one from Sydney and two from Melbourne.
Agents say the buyers were attracted by the "blue-chip" tenant, Australian Leisure & Hospitality Group, in which Woolworths has a 75 per cent stake. Melbourne publican Bruce Mathieson owns the remainder.
The pubs sold on investment yields as low as 5 per cent, prompting agents to speculate that private buyers, disgruntled by sharemarket and banking returns, are now prepared to pay more for pubs - relative to their rental income - than in previous months.
Vendor ALE Property Group, Australia's largest listed pub owner, reaped a 24 per cent premium on the pubs' book values at December 31.
ALE managing director Andrew Wilkinson said it was a "particularly strong" result in a "difficult market".
He said the sale last week of two of its Sydney pubs for $12 million - slightly more than book value - fuelled interest in the Melbourne sales. "Sydney set a benchmark and in the past week investors have been digesting that and knew that they'd have to turn up in Melbourne with a very sharp price."
The sales by ALE come as rival pub owners are expected to start flooding the market with sales. About 200 pubs in NSW are believed to be in breach of their lending covenants, with banks already pulling the plug on owners such as Winners Circle Group.
In Melbourne, the Cornerstone group needs to sell several of its assets after appointing administrators to deal with debts racked up during a buying frenzy at the top of the market in 2007.
ALE told the stock exchange it would "apply the proceeds of the sale to both debt reduction and to increase surplus cash balances". Mr Wilkinson said ALE was not a forced seller, and "at this stage" had no more plans to sell.
"We've got no refinancing coming for another two years, at least. From our point of view, our finances are in good shape … In this market, people are gravitating towards lower-risk, long-term, good-quality properties."
Agents were happy with the auction turnout but were reluctant to call a widespread recovery in pub sales, emphasising instead the rarity of what was on offer.
Scott Callow and Joel Fisher, of CBRE Hotels, jointly marketed the hotel portfolio with Raoul Holderhead and Dean Venturato of Burgess Rawson.
"The strength in the hotel investment market has been proven by this result … a number of private parties were bidding feverishly," Mr Callow said. "Quality assets are continuing to attract strong interest, given the lack of prime hotels available in the current market."
Each pub sold with 19-year leases to ALH, indexed to inflation, with options to renew for four 10-year terms. (Credit: The Age)
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Monday, June 22, 2009
Domain.com.au launches first-of-its-kind Australian iPhone application for house hunters
Domain.com.au launches first-of-its-kind Australian iPhone application for house hunters
Monday 22 June 2009: Online property site Domain.com.au has today launched a free* iPhone application through the Apple iPhone App Store.
The application is the first-of-its-kind in Australia. It makes searching for a property easier for Domain users, who can now search for properties to buy, rent and share in the paper, online, via their mobile and now within an iPhone application.
For real estate agents and property vendors, the iPhone application offers greater exposure for property listings, particularly while house-hunters are actively in the process of pounding the pavements.
Anthony Ishac, Domain.com.au spokesperson, comments “The iPhone application is one more way which Domain provides our agents with unique reach and unmatched support.”
Domain.com.au’s free iPhone application gives iPhone users the ability to:
Select criteria and search thousands of properties Australia-wide;
View property listings and photo galleries;
Shortlist favourite properties to view online or offline;
Check open for inspection times as well as auction dates and times;
View mortgage calculations for each property;
Email or call the agent/advertiser directly from the iPhone
This is Fairfax Digital’s first iPhone application developed in-house. It was created by the company’s newly-established Future Services team, which is tasked with creating innovative technologies to further extend the accessibility and convenience of Fairfax Digital’s sites, including its mastheads smh.com.au, theage.com.au and online classifieds such as Domain.com.au.
Anna Cicognani, Chief Product Officer, Fairfax Digital, comments, “This first product from the Fairfax Digital Future Services team is a sign of things to come. We are actively investing in innovative technologies to meet immediate and future consumer needs, as well as add demonstrable value to our partners’ businesses.
Sponsored by the Commonwealth Bank, the Domain.com.au iPhone application complements Domain.com.au’s existing mobile site for 3G enabled phones (m.domain.com.au) as well as its iPhone-ready mobile site. For more information and a video demonstration, visit: http://www.domain.com.au/iphoneapp.
The Domain.com.au application is available from the Apple iPhone App Store today. To download the application, just open the App Store on your iPhone or access the App Store directly from iTunes on your computer and search for Domain.com.au or visit http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=319908646.
* Please note that while the Domain iPhone application is free to download via Apple iTunes and the Apple App Store, users may incur fees as per their standard mobile or internet network charges for "data retrieval".
- ENDS -
About Domain.com.au
Part of the Fairfax Digital network, Domain.com.au is an indispensable source of national property listings and resources for Australian property buyers, sellers and renters. With a vast network of real estate agents Australia-wide, Domain.com.au contains the constantly refreshed information people need to make smarter property decisions.
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Monday 22 June 2009: Online property site Domain.com.au has today launched a free* iPhone application through the Apple iPhone App Store.
The application is the first-of-its-kind in Australia. It makes searching for a property easier for Domain users, who can now search for properties to buy, rent and share in the paper, online, via their mobile and now within an iPhone application.
For real estate agents and property vendors, the iPhone application offers greater exposure for property listings, particularly while house-hunters are actively in the process of pounding the pavements.
Anthony Ishac, Domain.com.au spokesperson, comments “The iPhone application is one more way which Domain provides our agents with unique reach and unmatched support.”
Domain.com.au’s free iPhone application gives iPhone users the ability to:
Select criteria and search thousands of properties Australia-wide;
View property listings and photo galleries;
Shortlist favourite properties to view online or offline;
Check open for inspection times as well as auction dates and times;
View mortgage calculations for each property;
Email or call the agent/advertiser directly from the iPhone
This is Fairfax Digital’s first iPhone application developed in-house. It was created by the company’s newly-established Future Services team, which is tasked with creating innovative technologies to further extend the accessibility and convenience of Fairfax Digital’s sites, including its mastheads smh.com.au, theage.com.au and online classifieds such as Domain.com.au.
Anna Cicognani, Chief Product Officer, Fairfax Digital, comments, “This first product from the Fairfax Digital Future Services team is a sign of things to come. We are actively investing in innovative technologies to meet immediate and future consumer needs, as well as add demonstrable value to our partners’ businesses.
Sponsored by the Commonwealth Bank, the Domain.com.au iPhone application complements Domain.com.au’s existing mobile site for 3G enabled phones (m.domain.com.au) as well as its iPhone-ready mobile site. For more information and a video demonstration, visit: http://www.domain.com.au/iphoneapp.
The Domain.com.au application is available from the Apple iPhone App Store today. To download the application, just open the App Store on your iPhone or access the App Store directly from iTunes on your computer and search for Domain.com.au or visit http://itunes.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=319908646.
* Please note that while the Domain iPhone application is free to download via Apple iTunes and the Apple App Store, users may incur fees as per their standard mobile or internet network charges for "data retrieval".
- ENDS -
About Domain.com.au
Part of the Fairfax Digital network, Domain.com.au is an indispensable source of national property listings and resources for Australian property buyers, sellers and renters. With a vast network of real estate agents Australia-wide, Domain.com.au contains the constantly refreshed information people need to make smarter property decisions.
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North Bondi clubhouse rescue, by Sharon Labi - The Sunday Telegraph - 21st June 2009
Australia's most famous beachfront is set for a $6 million makeover with plans to build a new surf club.
Despite being stripped of a $1.7 million federal Government grant last year, North Bondi Surf Lifesaving Club has lodged plans with Waverley Council for a modern, white, three-storey building at the world famous tourist spot.
Opposition leader and local Wentworth MP Malcolm Turnbull - who has been a member of the club since childhood - has personally donated $100,000, while the state government kicked in $500,000 and Waverley Council $750,000.
Members and nippers have also been slugged a building levy to help fund the redevelopment. The existing club is riddled with concrete cancer and has no access for the disabled.
It also lacks adequate storage space for all its surfcraft.
Its replacement will have a basement storage area, a gym, a boat shed and a function room.
Club administration director Karen Scott said about half the needed money had been raised and members were not keen to borrow the rest.
She added: "We're not looking at rebuilding until we've raised all the funds. We're still fairly heavily involved in a fund-raising effort. That was put back pretty severely when the Federal Government stripped our grant.
The grant was awarded in 2007 by the previous Coalition government, but scrapped by Labor in last year's Budget.
The DA may be reviewed if the club cannot raise the balance. Waverley Mayor Sally Betts said council had set a benchmark of $750,000 for several of its surf clubs and it was unlikely council would give North Bondi any more money.
Mr Turnbull has said his father used to take him to the club before he could walk, and last year accused Regional Development Minister Anthony Albanese of pulling the grant to punish Bondi because it was in his electorate.
Once approved, the DA is valid for five years. The plans will be on display until July 17. (Credit: The Sunday Telegraph)
Despite being stripped of a $1.7 million federal Government grant last year, North Bondi Surf Lifesaving Club has lodged plans with Waverley Council for a modern, white, three-storey building at the world famous tourist spot.
Opposition leader and local Wentworth MP Malcolm Turnbull - who has been a member of the club since childhood - has personally donated $100,000, while the state government kicked in $500,000 and Waverley Council $750,000.
Members and nippers have also been slugged a building levy to help fund the redevelopment. The existing club is riddled with concrete cancer and has no access for the disabled.
It also lacks adequate storage space for all its surfcraft.
Its replacement will have a basement storage area, a gym, a boat shed and a function room.
Club administration director Karen Scott said about half the needed money had been raised and members were not keen to borrow the rest.
She added: "We're not looking at rebuilding until we've raised all the funds. We're still fairly heavily involved in a fund-raising effort. That was put back pretty severely when the Federal Government stripped our grant.
The grant was awarded in 2007 by the previous Coalition government, but scrapped by Labor in last year's Budget.
The DA may be reviewed if the club cannot raise the balance. Waverley Mayor Sally Betts said council had set a benchmark of $750,000 for several of its surf clubs and it was unlikely council would give North Bondi any more money.
Mr Turnbull has said his father used to take him to the club before he could walk, and last year accused Regional Development Minister Anthony Albanese of pulling the grant to punish Bondi because it was in his electorate.
Once approved, the DA is valid for five years. The plans will be on display until July 17. (Credit: The Sunday Telegraph)
Saturday, June 20, 2009
Packer's $18m digs set for demolition, by Jonathan Chancellor - The Sydney Morning Herald - 20th June 2009
The billionaire James Packer and his wife, Erica, are understood to have spent $18 million on their first family property.
But neighbours do not expect them to be moving in until they demolish and rebuild the hillside Vaucluse holding.
Their disguised purchase was fronted by Matthew Csidei, a former housemate of Mr Packer, in an attempt to keep the vendor's price expectations as low as possible.
It was listed with $17 million-plus hopes through the agents Bill Bridges and Craig Pontey by the executors of the estate of the oil shale pioneer Sir Ian McFarlane, who died last year.
It comes with 2374 square metres of land - plenty of space for the Packers' 10-month-old daughter, Indigo, to enjoy a backyard away from the paparazzi.
The sale scuttles the entrepreneur Deke Miskin's hope that the Packers would buy the Point Piper harbourfront home Altona, in a deal where Mr Miskin would have secured Mr Packer's redundant Bondi Beach complex.
But there is still speculation that the Packers, who married in June 2007, may yet expand their Bellevue Hill holdings with the purchase of the 1890 property Leura, listed for $50 million.
Leura sits between Cairnton, Mr Packer's mother Roslyn's residence, and Winston, his sister, Gretel's house.
Any demolition of the Vaucluse house may cause controversy, as it is a landmark Guilford Bell house designed in the early 1970s for McFarlane.
Its proposed heritage listing by Woollahra Council was successfully opposed by McFarlane's solicitor, Robert Minter, in 2006.
McFarlane's valuer said heritage listing would diminish the property's value by $4 million, as the house's colonnade was an example of a style that was no longer popular. (Credit: The Sydney Morning Herald)
But neighbours do not expect them to be moving in until they demolish and rebuild the hillside Vaucluse holding.
Their disguised purchase was fronted by Matthew Csidei, a former housemate of Mr Packer, in an attempt to keep the vendor's price expectations as low as possible.
It was listed with $17 million-plus hopes through the agents Bill Bridges and Craig Pontey by the executors of the estate of the oil shale pioneer Sir Ian McFarlane, who died last year.
It comes with 2374 square metres of land - plenty of space for the Packers' 10-month-old daughter, Indigo, to enjoy a backyard away from the paparazzi.
The sale scuttles the entrepreneur Deke Miskin's hope that the Packers would buy the Point Piper harbourfront home Altona, in a deal where Mr Miskin would have secured Mr Packer's redundant Bondi Beach complex.
But there is still speculation that the Packers, who married in June 2007, may yet expand their Bellevue Hill holdings with the purchase of the 1890 property Leura, listed for $50 million.
Leura sits between Cairnton, Mr Packer's mother Roslyn's residence, and Winston, his sister, Gretel's house.
Any demolition of the Vaucluse house may cause controversy, as it is a landmark Guilford Bell house designed in the early 1970s for McFarlane.
Its proposed heritage listing by Woollahra Council was successfully opposed by McFarlane's solicitor, Robert Minter, in 2006.
McFarlane's valuer said heritage listing would diminish the property's value by $4 million, as the house's colonnade was an example of a style that was no longer popular. (Credit: The Sydney Morning Herald)
Tuesday, June 16, 2009
Chips down in Crown's Gateway, by Vanda Carson - The Sydney Morning Herald - 16th June 2009
Crown's Canadian casino joint venture with Macquarie Bank is in danger of breaching its banking covenants, credit rating agency Moody's has warned.
Moody's has downgraded the rating of Gateway Casinos and Entertainment by two notches to a level placing it in the category of companies "subject to a very high credit risk". The agency says Gateway may be forced to write down the value of its nine hotel-casino properties in western Canada.
It says the company's debt-to-earnings ratio is dangerously high at more than 10 times.
The Moody's rating now sits at Caa2, which is a junk rating in 17th position on a scale of 21.
Gateway has been cutting costs at its casinos since the start of the year, asking staff to take unpaid leave and forcing others to cut their hours.
But the response may not have been sufficient to alleviate the pressure of a hefty debt load.
While Crown and Macquarie Bank do not release details of the Canadian casinos' financial performance, it is believed that revenue is down by up to 20 per cent across its casinos, including two in Vancouver, one in Edmonton and six in the wider region of western Canada.
"Gateway's capital structure is not sustainable in its current form, and may require some form of restructuring that involves a level of impairment," Moody's said in a statement.
Crown paid $224 million for the share in the casinos at the top of the market in 2007. It has written down the value by $49 million and recorded a loss of $14.2 million in its December accounts.
Macquarie listed the Canadian investment as "held for sale" in its September half-year report. (Credit: The Sydney Morning Herald)
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Moody's has downgraded the rating of Gateway Casinos and Entertainment by two notches to a level placing it in the category of companies "subject to a very high credit risk". The agency says Gateway may be forced to write down the value of its nine hotel-casino properties in western Canada.
It says the company's debt-to-earnings ratio is dangerously high at more than 10 times.
The Moody's rating now sits at Caa2, which is a junk rating in 17th position on a scale of 21.
Gateway has been cutting costs at its casinos since the start of the year, asking staff to take unpaid leave and forcing others to cut their hours.
But the response may not have been sufficient to alleviate the pressure of a hefty debt load.
While Crown and Macquarie Bank do not release details of the Canadian casinos' financial performance, it is believed that revenue is down by up to 20 per cent across its casinos, including two in Vancouver, one in Edmonton and six in the wider region of western Canada.
"Gateway's capital structure is not sustainable in its current form, and may require some form of restructuring that involves a level of impairment," Moody's said in a statement.
Crown paid $224 million for the share in the casinos at the top of the market in 2007. It has written down the value by $49 million and recorded a loss of $14.2 million in its December accounts.
Macquarie listed the Canadian investment as "held for sale" in its September half-year report. (Credit: The Sydney Morning Herald)
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Saturday, June 13, 2009
Tom Cruise, Katie Holmes to stay in Crown's most expensive suite - Herald Sun - 13th June 2009
Hollywood's most famous Scientologists, Tom Cruise and Katie Holmes, will live like royalty when they take up residence at Crown's most expensive hotel suite this month.
TomKat will be guests of owner and fellow Scientologist James Packer when Holmes comes to town to film the big budget thriller, Don't Be Afraid Of The Dark.
The couple will stay in the newly refurbished palatial top floor of Crown Towers.
The suite, which normally costs $27,500 a night and takes up the entire 39th floor, is being refurbished as part of the $50 million refit of Crown Towers.
As guests, Cruise and Holmes will have panoramic views of the city, a butler and nanny service on call 24 hours a day.
The suite features a private lift, four bedrooms, spacious marble-lined bathrooms, dining areas, huge walk-in robes, studies, lounges, kitchens and powder rooms.
The main bedroom is said to be bigger than an average suburban house.
The refurbishment is expected to be completed in time for the couple's arrival.
It is unclear if TomKat will be charged by their good friend and casino-owner, Mr Packer. Cruise and Holmes will join an elite group to have stayed in the suite.
Ranked among the most extravagant and expensive hotel suites in the world, Room 3918 has been used by some of the world's biggest gamblers.
Not even former US president Bill Clinton was able to dislodge high roller George Lu from Room 3918 back in 2001.
Mr Clinton was later heard to remark: "I must meet this man, George Lu."
Crown casino declined to return the Herald Sun's calls, requesting questions by email, which also went unanswered. (Credit: Herald Sun)
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TomKat will be guests of owner and fellow Scientologist James Packer when Holmes comes to town to film the big budget thriller, Don't Be Afraid Of The Dark.
The couple will stay in the newly refurbished palatial top floor of Crown Towers.
The suite, which normally costs $27,500 a night and takes up the entire 39th floor, is being refurbished as part of the $50 million refit of Crown Towers.
As guests, Cruise and Holmes will have panoramic views of the city, a butler and nanny service on call 24 hours a day.
The suite features a private lift, four bedrooms, spacious marble-lined bathrooms, dining areas, huge walk-in robes, studies, lounges, kitchens and powder rooms.
The main bedroom is said to be bigger than an average suburban house.
The refurbishment is expected to be completed in time for the couple's arrival.
It is unclear if TomKat will be charged by their good friend and casino-owner, Mr Packer. Cruise and Holmes will join an elite group to have stayed in the suite.
Ranked among the most extravagant and expensive hotel suites in the world, Room 3918 has been used by some of the world's biggest gamblers.
Not even former US president Bill Clinton was able to dislodge high roller George Lu from Room 3918 back in 2001.
Mr Clinton was later heard to remark: "I must meet this man, George Lu."
Crown casino declined to return the Herald Sun's calls, requesting questions by email, which also went unanswered. (Credit: Herald Sun)
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Sunday, June 07, 2009
Crown hits jackpot with new tax deal, by Melissa Fyfe - The Age - 7th June 2009
The State Government's controversial deal with Crown Casino will add $41 million to the gaming venue's bottom line by 2015, according to a stockmarket analysis of the new arrangement.
A Deutsche Bank evaluation found that Crown will make more money from the deals 150 extra tables than it will lose from the State Government's tax increase.
After 2015, the deal will be worth an extra $10 million a year to Crown, the bank's analysts found.
Under the new arrangement — the biggest expansion of the casino in a decade — Crown's tax rate on its poker machines will lift from 21 per cent to 32 per cent in exchange for a boost to its gaming tables from 350 to 500.
Crown will also be able to double its poker tables within this limit and will no longer pay the $11 million-a-year levy that helped fund the state's health system.
The State Government wanted to change Crown's taxes following its reforms to the gaming industry, due in 2012. The deal, which locks in Crown's tax rates until 2022, was struck by Bruce Warner, a private negotiator hired by Treasury.
Mr Warner confirmed to The Sunday Age that billionaire Crown boss James Packer was present at several meetings during the 10-day negotiations earlier this year.
When the deal was announced last month, Gaming Minister Tony Robinson said that "Victorians would think this was a good deal" and Crown would think the deal was "less advantageous going forward".
But the Deutsche Bank report on the deal, by analysts Mark Wilson and Daniel Pi, describes the deal as a positive one for Crown, with an initial $10 million bottom-line loss in the financial years 2010 and 2011 changing to a $3 million net benefit in 2012, $19 million in 2013 and 2014 and a $10 million net benefit in 2015 and beyond.
The tax increase, the report said, "will be moderated by the roll-out of additional tables and the removal of the health benefit levy" (a tax on large gaming operators that helps fund the health system).
After claiming that the deal "virtually aligned" Crown's poker machine tax rates to those faced by its hotel competitors, the Government has now acknowledged that, after 2012, this will not be the case.
The machines in hotels most comparable to Crown's will be taxed at 50 and 58 per cent. In comparison, the casino's machines will face a 32 per cent tax on average monthly revenue. This means Crown gets a tax break on its poker machines of up to 80 per cent compared to its competitors after 2012.
Despite comments in Parliament last week about the deal aligning tax rates on poker machines, the State Government now says the deal is about aligning Crown's "overall tax rates" with its competitors.
Matt Nurse, a spokesman for the Treasurer John Lenders, said the Brumby Government has "effectively ended the tax break given to the casino, set up by the Kennett government, by virtually aligning the overall tax rates paid by the casino and the gaming operators".
Mr Nurse nominated another Crown tax, the super tax, as the reason the rates would be "virtually aligned". Under this tax, the casino must pay to the Government between 1 and 20 per cent on player losses of more than $880 million.
But Mr Nurse would not tell The Sunday Age how this tax may have changed under the deal or how much the Government collects under this tax. More details would be released, he said, when legislation came before Parliament.
Mr Lenders has said the Government stood to earn a $60 million tax windfall from the deal.
The deal has infuriated some of Crown's post-2012 competitors, the Australian Hotels Association and Clubs Victoria. "We would be delighted if the Government gave us the benefit it has given Crown — we would love to lock in our tax rate for 13 years," said the AHA's Victorian chief executive Brian Kearney.
Crown spokesman Gary O'Neill had no comment on the Deutsche Bank analysis. (Credit: The Age)
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A Deutsche Bank evaluation found that Crown will make more money from the deals 150 extra tables than it will lose from the State Government's tax increase.
After 2015, the deal will be worth an extra $10 million a year to Crown, the bank's analysts found.
Under the new arrangement — the biggest expansion of the casino in a decade — Crown's tax rate on its poker machines will lift from 21 per cent to 32 per cent in exchange for a boost to its gaming tables from 350 to 500.
Crown will also be able to double its poker tables within this limit and will no longer pay the $11 million-a-year levy that helped fund the state's health system.
The State Government wanted to change Crown's taxes following its reforms to the gaming industry, due in 2012. The deal, which locks in Crown's tax rates until 2022, was struck by Bruce Warner, a private negotiator hired by Treasury.
Mr Warner confirmed to The Sunday Age that billionaire Crown boss James Packer was present at several meetings during the 10-day negotiations earlier this year.
When the deal was announced last month, Gaming Minister Tony Robinson said that "Victorians would think this was a good deal" and Crown would think the deal was "less advantageous going forward".
But the Deutsche Bank report on the deal, by analysts Mark Wilson and Daniel Pi, describes the deal as a positive one for Crown, with an initial $10 million bottom-line loss in the financial years 2010 and 2011 changing to a $3 million net benefit in 2012, $19 million in 2013 and 2014 and a $10 million net benefit in 2015 and beyond.
The tax increase, the report said, "will be moderated by the roll-out of additional tables and the removal of the health benefit levy" (a tax on large gaming operators that helps fund the health system).
After claiming that the deal "virtually aligned" Crown's poker machine tax rates to those faced by its hotel competitors, the Government has now acknowledged that, after 2012, this will not be the case.
The machines in hotels most comparable to Crown's will be taxed at 50 and 58 per cent. In comparison, the casino's machines will face a 32 per cent tax on average monthly revenue. This means Crown gets a tax break on its poker machines of up to 80 per cent compared to its competitors after 2012.
Despite comments in Parliament last week about the deal aligning tax rates on poker machines, the State Government now says the deal is about aligning Crown's "overall tax rates" with its competitors.
Matt Nurse, a spokesman for the Treasurer John Lenders, said the Brumby Government has "effectively ended the tax break given to the casino, set up by the Kennett government, by virtually aligning the overall tax rates paid by the casino and the gaming operators".
Mr Nurse nominated another Crown tax, the super tax, as the reason the rates would be "virtually aligned". Under this tax, the casino must pay to the Government between 1 and 20 per cent on player losses of more than $880 million.
But Mr Nurse would not tell The Sunday Age how this tax may have changed under the deal or how much the Government collects under this tax. More details would be released, he said, when legislation came before Parliament.
Mr Lenders has said the Government stood to earn a $60 million tax windfall from the deal.
The deal has infuriated some of Crown's post-2012 competitors, the Australian Hotels Association and Clubs Victoria. "We would be delighted if the Government gave us the benefit it has given Crown — we would love to lock in our tax rate for 13 years," said the AHA's Victorian chief executive Brian Kearney.
Crown spokesman Gary O'Neill had no comment on the Deutsche Bank analysis. (Credit: The Age)
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Friday, June 05, 2009
Tuesday, June 02, 2009
James Packer's Macau dream rocks on, by Andrew Carswell - Herald Sun - 2nd June 2009
His fortune may have shrunk by billions of dollars but James Packer has opened the doors to what is arguably his biggest gamble yet.
Amid fanfare and fireworks, the first chips went down at the $2.9 billion City of Dreams - Mr Packer's second joint-venture casino to be built in Macau, the former Portuguese colony bordering southern China.
The increasingly reclusive billionaire stepped back into the spotlight last night to cut the ribbon to the new casino, alongside his chief partner in Melco Crown Entertainment, Lawrence Ho.
Christening one of its centrepieces, the Hard Rock Hotel, Mr Packer and Mr Ho smashed guitars hours before last night's celebrity-studded opening bash.
The City of Dreams stares directly across Macau's glitzy Cotai Strip at the Venetian, the world's biggest casino.
The property - almost 40,000 square metres - features 2000 gaming machines and tables, three hotels, a huge shopping, restaurant and entertainment precinct, and a spectacular multi-media attraction dubbed The Bubble.
"It is a crucial project," Lawrence Ho said.
"What is good for us . . . is good for our competitors and is good for Macau."
Experts believe there is much riding on the performance of the City of Dreams.
While Mr Packer has remained tight-lipped about the forecasts for the City of Dreams, Mr Ho has been brutally honest about the high-stakes game the men are playing in the middle of a global recession.
A poor reception for it may spell "the endgame for us," Mr Ho said last month.
"The investment case (for Melco Crown) basically comes down to how City of Dreams goes, so if you want to call it a sink-or-swim moment, well I guess it is," an analyst told BusinessDaily.
"Across the road you have the Venetian. That does about $500 million a year (in pre-tax earnings). The market is generally expecting City of Dreams to do $300 million. If it does that it's a success."
Since taking his late father Kerry's fortune above $6 billion, Mr Packer's net wealth has plummeted to $3 billion in the past year as shares in his divided kingdom - Crown Ltd and Consolidated Media Holdings - halved.
He is now only ranked the sixth richest Australian.
As well as Mr Packer staking much of his fortune on the venture, City of Dreams will be seen as an all-important test case for the future of Macau's gaming industry.
A 40-minute boat ride from Hong Kong, Macau now takes more gambling dollars than Las Vegas and Atlantic City combined.
But an attempt last year to stem the flow of visitors from mainland China dealt a dud hand to casino operators and put the brakes on the growth of the industry.
Mr Packer and Mr Ho hold a licence to build a third casino in Macau, but they remain publicly uncommitted to plans as yet. (Credit: Herald Sun)
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Amid fanfare and fireworks, the first chips went down at the $2.9 billion City of Dreams - Mr Packer's second joint-venture casino to be built in Macau, the former Portuguese colony bordering southern China.
The increasingly reclusive billionaire stepped back into the spotlight last night to cut the ribbon to the new casino, alongside his chief partner in Melco Crown Entertainment, Lawrence Ho.
Christening one of its centrepieces, the Hard Rock Hotel, Mr Packer and Mr Ho smashed guitars hours before last night's celebrity-studded opening bash.
The City of Dreams stares directly across Macau's glitzy Cotai Strip at the Venetian, the world's biggest casino.
The property - almost 40,000 square metres - features 2000 gaming machines and tables, three hotels, a huge shopping, restaurant and entertainment precinct, and a spectacular multi-media attraction dubbed The Bubble.
"It is a crucial project," Lawrence Ho said.
"What is good for us . . . is good for our competitors and is good for Macau."
Experts believe there is much riding on the performance of the City of Dreams.
While Mr Packer has remained tight-lipped about the forecasts for the City of Dreams, Mr Ho has been brutally honest about the high-stakes game the men are playing in the middle of a global recession.
A poor reception for it may spell "the endgame for us," Mr Ho said last month.
"The investment case (for Melco Crown) basically comes down to how City of Dreams goes, so if you want to call it a sink-or-swim moment, well I guess it is," an analyst told BusinessDaily.
"Across the road you have the Venetian. That does about $500 million a year (in pre-tax earnings). The market is generally expecting City of Dreams to do $300 million. If it does that it's a success."
Since taking his late father Kerry's fortune above $6 billion, Mr Packer's net wealth has plummeted to $3 billion in the past year as shares in his divided kingdom - Crown Ltd and Consolidated Media Holdings - halved.
He is now only ranked the sixth richest Australian.
As well as Mr Packer staking much of his fortune on the venture, City of Dreams will be seen as an all-important test case for the future of Macau's gaming industry.
A 40-minute boat ride from Hong Kong, Macau now takes more gambling dollars than Las Vegas and Atlantic City combined.
But an attempt last year to stem the flow of visitors from mainland China dealt a dud hand to casino operators and put the brakes on the growth of the industry.
Mr Packer and Mr Ho hold a licence to build a third casino in Macau, but they remain publicly uncommitted to plans as yet. (Credit: Herald Sun)
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Packer bets big on Dreams of Macau, by Miriam Steffens - The Sydney Morning Herald - 2nd June 2009
As James Packer's $US2.4 billion ($A3 billion) City of Dreams casino opened with great fanfare in Macau last night, after more than three years under construction, it marked the biggest gamble for the 41-year-old billionaire in his global gambling expansion.
A lot is riding on the success of the 39,000-square-metre casino built on a former swamp in the gaming mecca.
It is designed to be the flagship of Mr Packer's Asian gambling empire which he is building with Lawrence Ho, son of the Hong Kong tycoon Stanley Ho.
At stake are not only about $US500 million Crown has invested in its 36 per cent shareholding in the venture, but Mr Packer's reputation as a businessman, which has been bruised as his wealth more than halved over the past year in the global financial meltdown and after a series of ill-fated US casino investments.
But the opening of the prestige casino, which features a shopping precinct, its own bubble-shaped theatre, and close to two dozen restaurants and bars, comes at a challenging time. Travel demand to Macau has been hurt by the world recession and headwinds from Beijing, which last year imposed new visa restrictions to limit the number of mainland Chinese gambling in the former Portuguese colony.
Macau's gambling revenue and visitor arrivals fell every month except one between January 2008 and April. Melco Crown Entertainment, the Packer-Ho venture, posted a first-quarter loss of $US35.3 million, down from a profit of $US43.2 million a year earlier, as the decline in visitors hurt revenues at its first Macau casino, the Altira, which opened in 2007.
City of Dreams, located opposite Las Vegas Sands' huge Venetian Macao complex, starts out with about 520 table games, 1350 gaming machines and two hotels — Crown Towers and the Hard Rock Hotel — with a combined 600 guest rooms. A third hotel with 800 rooms should be finished later this year.
That compares with 350 gaming tables and about 1000 hotel rooms at Melbourne's Crown Casino, which will be expanded to about 1600 rooms by mid-2010.
With BLOOMBERG
(Credit: The Age)
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A lot is riding on the success of the 39,000-square-metre casino built on a former swamp in the gaming mecca.
It is designed to be the flagship of Mr Packer's Asian gambling empire which he is building with Lawrence Ho, son of the Hong Kong tycoon Stanley Ho.
At stake are not only about $US500 million Crown has invested in its 36 per cent shareholding in the venture, but Mr Packer's reputation as a businessman, which has been bruised as his wealth more than halved over the past year in the global financial meltdown and after a series of ill-fated US casino investments.
But the opening of the prestige casino, which features a shopping precinct, its own bubble-shaped theatre, and close to two dozen restaurants and bars, comes at a challenging time. Travel demand to Macau has been hurt by the world recession and headwinds from Beijing, which last year imposed new visa restrictions to limit the number of mainland Chinese gambling in the former Portuguese colony.
Macau's gambling revenue and visitor arrivals fell every month except one between January 2008 and April. Melco Crown Entertainment, the Packer-Ho venture, posted a first-quarter loss of $US35.3 million, down from a profit of $US43.2 million a year earlier, as the decline in visitors hurt revenues at its first Macau casino, the Altira, which opened in 2007.
City of Dreams, located opposite Las Vegas Sands' huge Venetian Macao complex, starts out with about 520 table games, 1350 gaming machines and two hotels — Crown Towers and the Hard Rock Hotel — with a combined 600 guest rooms. A third hotel with 800 rooms should be finished later this year.
That compares with 350 gaming tables and about 1000 hotel rooms at Melbourne's Crown Casino, which will be expanded to about 1600 rooms by mid-2010.
With BLOOMBERG
(Credit: The Age)
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Monday, June 01, 2009
Packer confident of his Macau gamble - The Australian - 30th May 2009
On Monday morning, James Packer will wake up in Macau to his moment of truth.
In the 3 1/2 years since the death of his legendary father, Kerry, Packer has transformed the family empire from one focused predominantly on media into the international casinos conglomerate Crown.
Monday's opening of Macau's City of Dreams casino -- one of the Chinese territory's most opulent and expensive -- is a crucial psychological marker on whether that transformation has been successful.
One of Packer's close confidants told The Weekend Australian this week the 42-year-old "always had a real belief in Macau and he's backed his belief". "City of Dreams is the culmination of that," the friend says. "It will be the jewel in the crown, in terms of size, of all of his casinos."
But with size comes risk. Packer has bet hundreds of millions of dollars of his money -- but more importantly his reputation as a major player on the international gaming scene alongside casino legends Stanley Ho, Steve Wynn and Sheldon Adelson -- on Macau.
Packer and Stanley Ho's son, Lawrence Ho -- his partner in the Melco Crown Entertainment joint venture behind the casino -- unveiled their plans for City of Dreams in the midst of an unseemly rush to develop a new Asian Las Vegas.
But today, such developments face pretty strong headwinds. In particular, gaming revenues in Macau are under pressure as the financial crisis and restrictions on Chinese citizens travelling to the former Portuguese colony bite. Even major players, such as the Las Vegas Sands, have reportedly delayed projects. Packer's fortunes have certainly fallen in line with the global crisis, with BRW magazine this week estimating his worth at $3 billion, down from $6.1 billion this time last year and the $7.3 billion he reportedly inherited from his father.
Still, Crown shares, of which the Packer family owns 36 per cent, have rallied strongly ahead of the City of Dreams opening. The run was spurred in part by Crown's escape from a proposed $US1.75 billion ($2.2 billion) takeover of Cannery Casino Resorts in the US. But one source close to Packer describes him as "quietly confident" about the future of City of Dreams. "I think we benefited from the fact there are a hell of a lot of cranes up there on unfinished projects," he says. "It is the only big new casino opening, and it will be the only one for some time."
The importance of Monday night's spectacular opening ceremony and first few months of trading are not lost on Melco Crown finance chief Simon Dewhurst. "City of Dreams is our flagship development," he says.
"It has consumed over 60 per cent of our investment capital and it represents our first opportunity in Macau to compete for the integrated resort middle ground that represents the future for the market. The opening of CoD marks the culmination of more than six years hard work. We are taking a transformational step from being primarily a development company, to being primarily an operating company."
Crown chief Rowen Craigie agrees the opening of City of Dreams represents "a major milestone". He says: "City of Dreams will be an exciting and attractive property and will benefit from being the only major casino entertainment complex to open in Macau in 2009."
City of Dreams, on Macau's popular Cotai strip, will be Melco Crown's second in the territory, following the opening of the $US760 million Crown Macau (now the Altira Macau) in 2007.
Analysts say City of Dreams is the first casino in Macau to break the $US2billion investment threshold. Its opening will be the culmination of a process that started before Kerry Packer's death when James settled on Macau as the first focal point of his global gaming ambitions.
In November 2004, Packer struck a joint venture agreement with the Hong Kong-listed leisure and entertainment group, Melco Development, run by Lawrence Ho. While there was little concrete announced at the time, it was soon made clear the joint venture company had big plans.
Once his father died in December 2005, Packer moved quickly to transform what was then the media-driven Publishing and Broadcasting Limited into a gaming empire. This transformation was highlighted late in 2006 with the top-of-the-market sale of PBL Media -- owner of the Nine Network and ACP Magazines -- to private equity firm CVC Asia Pacific for more than $5billion, just before the value of the assets started to decline amid both structural and cyclical change.
The PBL empire was left as largely a casino-focused one, and a subsequent split of the group in 2007 saw the casino assets hived off into the new casinos group, Crown.
But the move that signalled Packer's serious intent for gaming in Macau was his joint move with Melco just three months after his father's death to buy Macau's last available casino sub-concession from Wynn, the US casino entrepreneur, for $US900 million. The move cemented Packer and Ho as major players at the table of Macau's casino industry.
Altira Macau and City of Dreams are now held through Melco Crown Entertainment, which is listed on the Nasdaq index in the US and counts Crown as a 36.4 per cent shareholder.
Since 2006, Crown has also made a series of casino purchases independent of the Melco Crown venture in North America. These include stakes in the US-based Fontainebleau Resorts, Canada's Gateway Resorts group, Stations Casino Group and Harrah's Entertainment, underlining Packer's intense focus on gaming assets.
With the fall-off in casino values worldwide since the purchases, critics -- acting with the benefit of 20/20 hindsight -- have questioned the wisdom of his moves in both Macau and North America shortly before the global economic downturn. Even Crown's Rowen Craigie reportedly admitted earlier this year that the group had bought some of its US assets at the top of the market.
Crown's woes in the US were on full display in the company's interim profit result, with the group posting a reported net loss of $409.7 million due to a non-recurring $454.9 million writedown to the value of its minority US casino investments -- namely Fontainebleau, Stations and Harrah's.
But Packer's supporters assert that while there has been a fall in value of the US ventures in particular, he is well up on his Macau investments. After its $US45 million investment in Melco Crown's $US180 million capital raising this month, Crown has now invested a total of $US500 million in the group. That stake is now worth more than $US1 billion. Friends point out that Packer has effectively doubled his money and, in the process, gained a major say in a business that has two casinos fully funded, one of only six casino licences in Macau, and assorted hotels, retail complexes and entertainment venues supporting the casinos.
Melco Crown is not without problems. It booked a March quarter net loss of $US35.3 million, compared to a profit of $US43.2 million for the same period last year, prompting Ho to admit the casino market was not out of the woods yet. One analyst noted that Crown Macau had a "very poor opening" in 2007, with Packer's reputation suffering as a result. City of Dreams, he says, represents "a very critical moment".
Then again, Deutsche Bank last week raised its price target on Melco Crown from $US4.40 to $US6 a share, saying it was "now more confident on the success of City of Dreams after we walked through the property early this month".
City of Dreams certainly sounds impressive. Ho promises the water- and fantasy-themed complex will be a "next-generation resort like no other in Asia, or perhaps the world".
Located directly opposite the biggest casino in Macau -- the Las Vegas Sands Venetian Macau -- it will boast several distinctly branded casino floors, three world-class hotels and a shopping precinct to be known as The Boulevard.
On Monday, Melco Crown opens the first phase of that project, which will include the Crown Towers and Hard Rock hotels, 20 bars and restaurants, The Boulevard, plus a casino with 520 gaming tables (a third of which will be VIP) and 1350 gaming machines. It will be the only major casino to open in Macau this calendar year.
The casino's Bubble Theatre will feature a 10-minute "Dragon's Treasure" multi-media lights show. Theatre of Dreams, a 2000-seat theatre, will feature a Cirque Du Soleil-style water production when it opens in the December half. By December, the third hotel, the Grand Hyatt, will open, giving the complex a total of 1400 rooms. And there is even the future prospect of a further apartment development in the complex, subject to Macau regulatory approval. Melco's Dewhurst says Melco Crown is "very confident". He says: "We have spent a very significant amount of time, energy and resource into understanding what's working and what's not working throughout the market. We think City of Dreams is right."
Success for Melco Crown and City of Dreams will come down to a number of things. But one key measure will be foot traffic. "We expect that we will have something in the order of 35,000 guests a day passing through the property," Dewhurst says. "I have no doubt that we will have in excess of that number on the first day. In the first 100 days what's important for us is that on any of those 100 days we see that volume of traffic into the building."
In the current climate, that could be a challenge. Its performance will hinge on the recovery of the Asian economy -- and in particular how quickly Asian high-rollers return to the territory's casinos after the tough recent times.
Credit Suisse analyst Gabriel Chan said in a note last week that "with concerns about swine flu remaining vital, and signs that the recovery pace of the Chinese economy may have slowed, we see certain execution risks for the opening".
Indeed, visitor numbers to Macau, as recorded by the Statistics and Census Service, were down 3.5 per cent in April from the same period last year and steady over the previous month. Visitors from mainland China were down 13.5 per cent year on year.
Gaming revenues have suffered as a result of weaker visitor arrivals, but the pace of the decline has stabilised in the past few months. And there are hopes, from Ho down, for a swift rebound, partly driven by the buzz from the City of Dreams opening.
Some analysts believe that as Macau's most expensive casino, City of Dreams may be able to take market share from other players.
Janet Brashear, senior gaming analyst with US investment house Sanford C. Bernstein, says she expects City of Dreams to "make a splash, garnering $US1.4 billion in gross gaming revenues in 2010 and a 10 per cent share of the market". She also predicts City of Dreams could cannibalise the market share of some of its competitors in Macau, such as the Venetian Macau and Wynn resort.
For analysts, success will come down to one thing -- City of Dreams achieving an earnings before interest, tax, depreciation and amortisation of about $US300 million in the first year.
"You look across the road at the Venetian and they're doing about $US120 million EBITDA a quarter -- $US500 million a year," says one analyst. "So you would have thought $US300 million would be achievable for City of Dreams."
If City of Dreams achieves better than that -- say $US500 million a year -- then it will be a strong position against its rivals. There is growing speculation that casino giant MGM may have to sell its Macau interests after US regulators raised concerns about its local joint venture partner, Pansy Ho -- the daughter of Stanley and brother of Lawrence. Las Vegas Sands is also looking to sell some plots.
One close Packer confidant is hedging his bets ahead of Monday's event. He says: "On the assumption that the Macau economy will start to improve, Melco and City of Dreams are going to be in a very good place." (The Australian)
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In the 3 1/2 years since the death of his legendary father, Kerry, Packer has transformed the family empire from one focused predominantly on media into the international casinos conglomerate Crown.
Monday's opening of Macau's City of Dreams casino -- one of the Chinese territory's most opulent and expensive -- is a crucial psychological marker on whether that transformation has been successful.
One of Packer's close confidants told The Weekend Australian this week the 42-year-old "always had a real belief in Macau and he's backed his belief". "City of Dreams is the culmination of that," the friend says. "It will be the jewel in the crown, in terms of size, of all of his casinos."
But with size comes risk. Packer has bet hundreds of millions of dollars of his money -- but more importantly his reputation as a major player on the international gaming scene alongside casino legends Stanley Ho, Steve Wynn and Sheldon Adelson -- on Macau.
Packer and Stanley Ho's son, Lawrence Ho -- his partner in the Melco Crown Entertainment joint venture behind the casino -- unveiled their plans for City of Dreams in the midst of an unseemly rush to develop a new Asian Las Vegas.
But today, such developments face pretty strong headwinds. In particular, gaming revenues in Macau are under pressure as the financial crisis and restrictions on Chinese citizens travelling to the former Portuguese colony bite. Even major players, such as the Las Vegas Sands, have reportedly delayed projects. Packer's fortunes have certainly fallen in line with the global crisis, with BRW magazine this week estimating his worth at $3 billion, down from $6.1 billion this time last year and the $7.3 billion he reportedly inherited from his father.
Still, Crown shares, of which the Packer family owns 36 per cent, have rallied strongly ahead of the City of Dreams opening. The run was spurred in part by Crown's escape from a proposed $US1.75 billion ($2.2 billion) takeover of Cannery Casino Resorts in the US. But one source close to Packer describes him as "quietly confident" about the future of City of Dreams. "I think we benefited from the fact there are a hell of a lot of cranes up there on unfinished projects," he says. "It is the only big new casino opening, and it will be the only one for some time."
The importance of Monday night's spectacular opening ceremony and first few months of trading are not lost on Melco Crown finance chief Simon Dewhurst. "City of Dreams is our flagship development," he says.
"It has consumed over 60 per cent of our investment capital and it represents our first opportunity in Macau to compete for the integrated resort middle ground that represents the future for the market. The opening of CoD marks the culmination of more than six years hard work. We are taking a transformational step from being primarily a development company, to being primarily an operating company."
Crown chief Rowen Craigie agrees the opening of City of Dreams represents "a major milestone". He says: "City of Dreams will be an exciting and attractive property and will benefit from being the only major casino entertainment complex to open in Macau in 2009."
City of Dreams, on Macau's popular Cotai strip, will be Melco Crown's second in the territory, following the opening of the $US760 million Crown Macau (now the Altira Macau) in 2007.
Analysts say City of Dreams is the first casino in Macau to break the $US2billion investment threshold. Its opening will be the culmination of a process that started before Kerry Packer's death when James settled on Macau as the first focal point of his global gaming ambitions.
In November 2004, Packer struck a joint venture agreement with the Hong Kong-listed leisure and entertainment group, Melco Development, run by Lawrence Ho. While there was little concrete announced at the time, it was soon made clear the joint venture company had big plans.
Once his father died in December 2005, Packer moved quickly to transform what was then the media-driven Publishing and Broadcasting Limited into a gaming empire. This transformation was highlighted late in 2006 with the top-of-the-market sale of PBL Media -- owner of the Nine Network and ACP Magazines -- to private equity firm CVC Asia Pacific for more than $5billion, just before the value of the assets started to decline amid both structural and cyclical change.
The PBL empire was left as largely a casino-focused one, and a subsequent split of the group in 2007 saw the casino assets hived off into the new casinos group, Crown.
But the move that signalled Packer's serious intent for gaming in Macau was his joint move with Melco just three months after his father's death to buy Macau's last available casino sub-concession from Wynn, the US casino entrepreneur, for $US900 million. The move cemented Packer and Ho as major players at the table of Macau's casino industry.
Altira Macau and City of Dreams are now held through Melco Crown Entertainment, which is listed on the Nasdaq index in the US and counts Crown as a 36.4 per cent shareholder.
Since 2006, Crown has also made a series of casino purchases independent of the Melco Crown venture in North America. These include stakes in the US-based Fontainebleau Resorts, Canada's Gateway Resorts group, Stations Casino Group and Harrah's Entertainment, underlining Packer's intense focus on gaming assets.
With the fall-off in casino values worldwide since the purchases, critics -- acting with the benefit of 20/20 hindsight -- have questioned the wisdom of his moves in both Macau and North America shortly before the global economic downturn. Even Crown's Rowen Craigie reportedly admitted earlier this year that the group had bought some of its US assets at the top of the market.
Crown's woes in the US were on full display in the company's interim profit result, with the group posting a reported net loss of $409.7 million due to a non-recurring $454.9 million writedown to the value of its minority US casino investments -- namely Fontainebleau, Stations and Harrah's.
But Packer's supporters assert that while there has been a fall in value of the US ventures in particular, he is well up on his Macau investments. After its $US45 million investment in Melco Crown's $US180 million capital raising this month, Crown has now invested a total of $US500 million in the group. That stake is now worth more than $US1 billion. Friends point out that Packer has effectively doubled his money and, in the process, gained a major say in a business that has two casinos fully funded, one of only six casino licences in Macau, and assorted hotels, retail complexes and entertainment venues supporting the casinos.
Melco Crown is not without problems. It booked a March quarter net loss of $US35.3 million, compared to a profit of $US43.2 million for the same period last year, prompting Ho to admit the casino market was not out of the woods yet. One analyst noted that Crown Macau had a "very poor opening" in 2007, with Packer's reputation suffering as a result. City of Dreams, he says, represents "a very critical moment".
Then again, Deutsche Bank last week raised its price target on Melco Crown from $US4.40 to $US6 a share, saying it was "now more confident on the success of City of Dreams after we walked through the property early this month".
City of Dreams certainly sounds impressive. Ho promises the water- and fantasy-themed complex will be a "next-generation resort like no other in Asia, or perhaps the world".
Located directly opposite the biggest casino in Macau -- the Las Vegas Sands Venetian Macau -- it will boast several distinctly branded casino floors, three world-class hotels and a shopping precinct to be known as The Boulevard.
On Monday, Melco Crown opens the first phase of that project, which will include the Crown Towers and Hard Rock hotels, 20 bars and restaurants, The Boulevard, plus a casino with 520 gaming tables (a third of which will be VIP) and 1350 gaming machines. It will be the only major casino to open in Macau this calendar year.
The casino's Bubble Theatre will feature a 10-minute "Dragon's Treasure" multi-media lights show. Theatre of Dreams, a 2000-seat theatre, will feature a Cirque Du Soleil-style water production when it opens in the December half. By December, the third hotel, the Grand Hyatt, will open, giving the complex a total of 1400 rooms. And there is even the future prospect of a further apartment development in the complex, subject to Macau regulatory approval. Melco's Dewhurst says Melco Crown is "very confident". He says: "We have spent a very significant amount of time, energy and resource into understanding what's working and what's not working throughout the market. We think City of Dreams is right."
Success for Melco Crown and City of Dreams will come down to a number of things. But one key measure will be foot traffic. "We expect that we will have something in the order of 35,000 guests a day passing through the property," Dewhurst says. "I have no doubt that we will have in excess of that number on the first day. In the first 100 days what's important for us is that on any of those 100 days we see that volume of traffic into the building."
In the current climate, that could be a challenge. Its performance will hinge on the recovery of the Asian economy -- and in particular how quickly Asian high-rollers return to the territory's casinos after the tough recent times.
Credit Suisse analyst Gabriel Chan said in a note last week that "with concerns about swine flu remaining vital, and signs that the recovery pace of the Chinese economy may have slowed, we see certain execution risks for the opening".
Indeed, visitor numbers to Macau, as recorded by the Statistics and Census Service, were down 3.5 per cent in April from the same period last year and steady over the previous month. Visitors from mainland China were down 13.5 per cent year on year.
Gaming revenues have suffered as a result of weaker visitor arrivals, but the pace of the decline has stabilised in the past few months. And there are hopes, from Ho down, for a swift rebound, partly driven by the buzz from the City of Dreams opening.
Some analysts believe that as Macau's most expensive casino, City of Dreams may be able to take market share from other players.
Janet Brashear, senior gaming analyst with US investment house Sanford C. Bernstein, says she expects City of Dreams to "make a splash, garnering $US1.4 billion in gross gaming revenues in 2010 and a 10 per cent share of the market". She also predicts City of Dreams could cannibalise the market share of some of its competitors in Macau, such as the Venetian Macau and Wynn resort.
For analysts, success will come down to one thing -- City of Dreams achieving an earnings before interest, tax, depreciation and amortisation of about $US300 million in the first year.
"You look across the road at the Venetian and they're doing about $US120 million EBITDA a quarter -- $US500 million a year," says one analyst. "So you would have thought $US300 million would be achievable for City of Dreams."
If City of Dreams achieves better than that -- say $US500 million a year -- then it will be a strong position against its rivals. There is growing speculation that casino giant MGM may have to sell its Macau interests after US regulators raised concerns about its local joint venture partner, Pansy Ho -- the daughter of Stanley and brother of Lawrence. Las Vegas Sands is also looking to sell some plots.
One close Packer confidant is hedging his bets ahead of Monday's event. He says: "On the assumption that the Macau economy will start to improve, Melco and City of Dreams are going to be in a very good place." (The Australian)
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James Packer's biggest casino venture opens in Macau today - The Daily Telegraph - 1st June 2009
It is arguably James Packer's biggest and boldest venture, a key pillar in the man's grand plan of global gaming dominance. And it opens today.
It is the much-hyped City of Dreams, a colossal casino resort on Macau's glitzy Cotai Strip and the second instalment from Melco Crown (MPEL), the company jointly owned by Packer's Crown Limited, and Melco.
There is no disputing the fanfare with which the grandiose complex will open, but what is a hot topic is whether the venture will be a success.
The timing, amid a global meltdown and hampered by a forced slowdown of tourists entering Macau, is not helpful.
But it does have one key advantage. It is the only casino opening in Macau this year, after much-larger projects were postponed.
One gaming analyst told The Daily Telegraph the City of Dreams "was a sink or swim moment" for MPEL.
But UBS analysts believes product offering, and most surprisingly timing, will make City of Dreams a success.
"Against the context of limited supply growth, improving market revenue trends, and City of Dream's scale and product, MPEL is arguably in the right place at the right time," the analysts said in a report.
Melco Crown suffered an inglorious start to life in Macau with Crown Macau failing to attract the punters due to its location and public perceptions that the complex had Feng Shui design issues.
Recently reborn as Altira Macau, the complex has since flourished thanks to the significant revenue generated by VIP gamblers ferried in from Hong Kong.
MPEL does hold a licence to build a third casino complex in Macau, but has not committed to plans as yet. (Credit: The Daily Telegraph)
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It is the much-hyped City of Dreams, a colossal casino resort on Macau's glitzy Cotai Strip and the second instalment from Melco Crown (MPEL), the company jointly owned by Packer's Crown Limited, and Melco.
There is no disputing the fanfare with which the grandiose complex will open, but what is a hot topic is whether the venture will be a success.
The timing, amid a global meltdown and hampered by a forced slowdown of tourists entering Macau, is not helpful.
But it does have one key advantage. It is the only casino opening in Macau this year, after much-larger projects were postponed.
One gaming analyst told The Daily Telegraph the City of Dreams "was a sink or swim moment" for MPEL.
But UBS analysts believes product offering, and most surprisingly timing, will make City of Dreams a success.
"Against the context of limited supply growth, improving market revenue trends, and City of Dream's scale and product, MPEL is arguably in the right place at the right time," the analysts said in a report.
Melco Crown suffered an inglorious start to life in Macau with Crown Macau failing to attract the punters due to its location and public perceptions that the complex had Feng Shui design issues.
Recently reborn as Altira Macau, the complex has since flourished thanks to the significant revenue generated by VIP gamblers ferried in from Hong Kong.
MPEL does hold a licence to build a third casino complex in Macau, but has not committed to plans as yet. (Credit: The Daily Telegraph)
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Wednesday, May 27, 2009
Vic govt denies favours for Crown casino, by Katie Bradford - Fairfax - 27th May 2009
The Victorian government denies giving special favours to Crown casino but admits it has a close working relationship.
Two weeks after announcing it was allowing Crown to expand its gaming floor in return for increased poker machine tax, Tourism Minister Tim Holding defended the government's relationship with the casino while promoting its new hotel on Monday.
"We work closely with Crown but there's no deal in relation to this development," Mr Holding told reporters.
"Whether you're coming to dine in the magnificent restaurant, whether you want to stay in the fantastic hotel, whether you're wanting to gamble in the casino ... whatever you want to do here on site there are fantastic opportunities to do so.
"The government is very pleased that Crown is so confident in the tourism industry of Victoria that it has decided to build Australia's biggest hotel."
Anti-gambling campaigners accused the government of having a "cosy" relationship with Crown after permitting it to expand its gaming area by a further 150 tables.
In exchange, Crown's tax rate on its poker machines will progressively increase by 10 per cent to 32.5 per cent by 2014/15 - only then matching what other gaming venues already pay.
"We actually use this as an example of how Crown is being treated the same as other venues across Victoria," Mr Holding said.
Crown Melbourne's chief executive David Courtney refused to comment on his relationship with the government, or the tax deal.
"We're really here today to talk about the new hotel, it's a significant investment," he told reporters.
Under repeated questioning, Mr Courtney said it had been 10 years since Crown had been allowed to expand its gaming operations.
"It's very important to allow us to beat international competitors."
He refused to answer questions on whether the casino had a "sweetheart relationship" with the state government.
But Mr Courtney admitted the expansion would attract more high rollers.
Victorian opposition leader Ted Baillieu said the relationship between the government and the venue was "obviously very close".
He demanded the government answer further questions about the extra tables deal, including who initiated it and what the exact conditions were.
"Clearly, until these questions are being answered by the government, it ought to be very cautious about the relationship."
Mr Baillieu said Mr Holding would do "anything he believes was in his own interests".
"But that's the way this government operates, this is a government of political patronage, this is the government that's searching for favours all over the place but it's lost touch with the community, it's lost touch with reality and has no credibility on integrity, on corruption and on good governance." (Credit: Fairfax)
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Two weeks after announcing it was allowing Crown to expand its gaming floor in return for increased poker machine tax, Tourism Minister Tim Holding defended the government's relationship with the casino while promoting its new hotel on Monday.
"We work closely with Crown but there's no deal in relation to this development," Mr Holding told reporters.
"Whether you're coming to dine in the magnificent restaurant, whether you want to stay in the fantastic hotel, whether you're wanting to gamble in the casino ... whatever you want to do here on site there are fantastic opportunities to do so.
"The government is very pleased that Crown is so confident in the tourism industry of Victoria that it has decided to build Australia's biggest hotel."
Anti-gambling campaigners accused the government of having a "cosy" relationship with Crown after permitting it to expand its gaming area by a further 150 tables.
In exchange, Crown's tax rate on its poker machines will progressively increase by 10 per cent to 32.5 per cent by 2014/15 - only then matching what other gaming venues already pay.
"We actually use this as an example of how Crown is being treated the same as other venues across Victoria," Mr Holding said.
Crown Melbourne's chief executive David Courtney refused to comment on his relationship with the government, or the tax deal.
"We're really here today to talk about the new hotel, it's a significant investment," he told reporters.
Under repeated questioning, Mr Courtney said it had been 10 years since Crown had been allowed to expand its gaming operations.
"It's very important to allow us to beat international competitors."
He refused to answer questions on whether the casino had a "sweetheart relationship" with the state government.
But Mr Courtney admitted the expansion would attract more high rollers.
Victorian opposition leader Ted Baillieu said the relationship between the government and the venue was "obviously very close".
He demanded the government answer further questions about the extra tables deal, including who initiated it and what the exact conditions were.
"Clearly, until these questions are being answered by the government, it ought to be very cautious about the relationship."
Mr Baillieu said Mr Holding would do "anything he believes was in his own interests".
"But that's the way this government operates, this is a government of political patronage, this is the government that's searching for favours all over the place but it's lost touch with the community, it's lost touch with reality and has no credibility on integrity, on corruption and on good governance." (Credit: Fairfax)
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Sunday, May 24, 2009
Global downturn hammers James Packer's gambling ambitions, by Eli Greenblat - The Age - 22nd May 2009
James Packer's growing casino operation in Macau is the latest victim of the global downturn.
Dwindling patronage at Crown's Macau joint venture, which posted a $US35.3 million ($A45.6 million) first-quarter loss on a 55 per cent revenue slump, is challenging his push into the region.
Melco Crown Entertainment, which operates the Altira Macau casino and is building the $US2 billion City of Dreams casino, reported overnight that in the first quarter of this year revenue fell to $US216.5 million, down from $US482.9 million in the previous corresponding period.
Revenue from its maiden Altira development dropped 60 per cent in the period.
Although Melco Crown Entertainment's adjusted pre-tax and depreciation earnings were significantly weaker, they remained in the black at $US21.3 million. But the bottom line was deep in the red and showed a $US35.3 million loss against a $US43.2 million profit previously.
The souring performance reflects the depressed state of major casino and gambling businesses in Asia and the US, forcing companies to slash the value of their assets in the face of a drop in consumer spending on gambling and entertainment.
For Mr Packer, it is a further blow to his ambitions in the region as he tries to broaden Crown's earnings base away from Australia — where the company owns Melbourne's Crown Casino and Burswood Casino in Perth — to the Asian region and North America. In 2006, soon after the death of his father, Kerry, James Packer forged a $US8.7 billion venture with Lawrence Ho's Melco casino group to create Melco Crown Entertainment. Mr Ho is the son of Macau gambling kingpin Stanley Ho.
Crown, then called Publishing and Broadcasting Ltd, took a post-listing 41.4 per cent equity share in the joint venture that was valued at $A4.73 billion when Melco Crown Entertainment stock began trading on Nasdaq and closed its first day at $US21.55.
Since then, Crown's stake in the joint venture has been diluted to 36.4 per cent while Melco Crown Entertainment shares have fallen to $US5.85.
At Crown's half-year financial report, chief executive Rowen Craigie said its share of Melco Crown Entertainment's normalised result for the half was an $A11.3 million loss. The venture's Altira Macau casino recorded $US183.6 million net revenue for the March quarter versus $US459.9 million for the same quarter last year.
Constellation Capital Management investment analyst Peter Chilton said yesterday the Macau casino market was having earnings problems similar to those of Las Vegas.
"It probably is under some pressure with a lot of new capacity and at the same time the actual business available has slowed down, because of the downturn in China," he said. "And we have seen it in the United States as well, where people are less willing to, and have less funds available, to put into casinos.
"Las Vegas is suffering as well. I think maybe people had thought of casinos as fairly recession-type-proof businesses but there is obviously a limit in a serious downturn — people do visit these establishments less, or spend less money."
Melco Crown Entertainment co-chairman and chief executive Mr Ho said City of Dreams was scheduled to open on June 1, and the budget was unchanged.
"Our financial position remains strong and our balance sheet is one of the best in the gaming industry," he said. "We held approximately $US755 million of cash, excluding cage cash, at the end of the first quarter, and we expect to spend approximately $US244 million on construction and pre-opening preparations at City of Dreams from the start of the current quarter through its opening."
Crown shares fell 2¢ to $6.97.
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(Credit: The Age)
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Dwindling patronage at Crown's Macau joint venture, which posted a $US35.3 million ($A45.6 million) first-quarter loss on a 55 per cent revenue slump, is challenging his push into the region.
Melco Crown Entertainment, which operates the Altira Macau casino and is building the $US2 billion City of Dreams casino, reported overnight that in the first quarter of this year revenue fell to $US216.5 million, down from $US482.9 million in the previous corresponding period.
Revenue from its maiden Altira development dropped 60 per cent in the period.
Although Melco Crown Entertainment's adjusted pre-tax and depreciation earnings were significantly weaker, they remained in the black at $US21.3 million. But the bottom line was deep in the red and showed a $US35.3 million loss against a $US43.2 million profit previously.
The souring performance reflects the depressed state of major casino and gambling businesses in Asia and the US, forcing companies to slash the value of their assets in the face of a drop in consumer spending on gambling and entertainment.
For Mr Packer, it is a further blow to his ambitions in the region as he tries to broaden Crown's earnings base away from Australia — where the company owns Melbourne's Crown Casino and Burswood Casino in Perth — to the Asian region and North America. In 2006, soon after the death of his father, Kerry, James Packer forged a $US8.7 billion venture with Lawrence Ho's Melco casino group to create Melco Crown Entertainment. Mr Ho is the son of Macau gambling kingpin Stanley Ho.
Crown, then called Publishing and Broadcasting Ltd, took a post-listing 41.4 per cent equity share in the joint venture that was valued at $A4.73 billion when Melco Crown Entertainment stock began trading on Nasdaq and closed its first day at $US21.55.
Since then, Crown's stake in the joint venture has been diluted to 36.4 per cent while Melco Crown Entertainment shares have fallen to $US5.85.
At Crown's half-year financial report, chief executive Rowen Craigie said its share of Melco Crown Entertainment's normalised result for the half was an $A11.3 million loss. The venture's Altira Macau casino recorded $US183.6 million net revenue for the March quarter versus $US459.9 million for the same quarter last year.
Constellation Capital Management investment analyst Peter Chilton said yesterday the Macau casino market was having earnings problems similar to those of Las Vegas.
"It probably is under some pressure with a lot of new capacity and at the same time the actual business available has slowed down, because of the downturn in China," he said. "And we have seen it in the United States as well, where people are less willing to, and have less funds available, to put into casinos.
"Las Vegas is suffering as well. I think maybe people had thought of casinos as fairly recession-type-proof businesses but there is obviously a limit in a serious downturn — people do visit these establishments less, or spend less money."
Melco Crown Entertainment co-chairman and chief executive Mr Ho said City of Dreams was scheduled to open on June 1, and the budget was unchanged.
"Our financial position remains strong and our balance sheet is one of the best in the gaming industry," he said. "We held approximately $US755 million of cash, excluding cage cash, at the end of the first quarter, and we expect to spend approximately $US244 million on construction and pre-opening preparations at City of Dreams from the start of the current quarter through its opening."
Crown shares fell 2¢ to $6.97.
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(Credit: The Age)
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Friday, May 22, 2009
Sunday, May 17, 2009
Branson plans launch of Virgin internet bank, by Richard Wachman - The Observer - 17th May 2009
Richard Branson is to launch an internet bank in a move designed to exploit public disgust with Britain's big banks in the wake of the credit crunch.
Branson follows Tesco, which is also planning to capitalise on disenchantment with traditional banking via a big push into financial services.
The entrepreneur will act through his Virgin Money subsidiary, which is headed by Jayne-Anne Gadhia, a former boss of RBS's mortgage division and marketing director of Norwich Union.
Virgin Money is understood to be poised to apply for a banking licence from the Financial Services Authority to allow it to take deposits and offer mortgages for the first time. Branson is talking to US investment banks and other investors about financial backing.
He is also talking with advisers about more ambitious plans that could see Virgin launch a bid for Northern Rock, if the government decides to sell part of the bank back to the private sector before the general election in May 2010.
Credit Suisse, the Treasury's financial adviser, is thought to have sounded out potential buyers in recent weeks. Virgin Money failed in an earlier bid to acquire Northern Rock, which was nationalised by the government in early 2008.
Virgin is looking at three options: launching a new bank, complete with a branch network; entering a partnership with another financial player; or buying a stricken bank, such as Northern Rock, as part of a larger consortium.
Virgin Money is shortly to announce that sales leapt from £70m to around £100m in 2008. Profits are estimated to come in at £30m.
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Branson follows Tesco, which is also planning to capitalise on disenchantment with traditional banking via a big push into financial services.
The entrepreneur will act through his Virgin Money subsidiary, which is headed by Jayne-Anne Gadhia, a former boss of RBS's mortgage division and marketing director of Norwich Union.
Virgin Money is understood to be poised to apply for a banking licence from the Financial Services Authority to allow it to take deposits and offer mortgages for the first time. Branson is talking to US investment banks and other investors about financial backing.
He is also talking with advisers about more ambitious plans that could see Virgin launch a bid for Northern Rock, if the government decides to sell part of the bank back to the private sector before the general election in May 2010.
Credit Suisse, the Treasury's financial adviser, is thought to have sounded out potential buyers in recent weeks. Virgin Money failed in an earlier bid to acquire Northern Rock, which was nationalised by the government in early 2008.
Virgin is looking at three options: launching a new bank, complete with a branch network; entering a partnership with another financial player; or buying a stricken bank, such as Northern Rock, as part of a larger consortium.
Virgin Money is shortly to announce that sales leapt from £70m to around £100m in 2008. Profits are estimated to come in at £30m.
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Saturday, May 16, 2009
Second high-roller deal for Crown casino, by Michael Warner - Herald Sun - 16th May 2009
EXCLUSIVE: CROWN casino has hit the jackpot for the second time this week.
The state's gambling watchdog revealed it had given preliminary approval for Crown to expand its rich high-roller Mahogany Room.
It comes just days after Premier John Brumby announced the casino would be granted an extra 150 gaming tables in a sweetheart deal with its billionaire owner, James Packer.
The Mahogany Room expansion will see a new VIP facility built above the Crown Towers driveway at the casino's eastern end.
High-stakes roulette, blackjack and baccarat tables will cater for bets of up to $280,000.
And smoking will also be permitted under special international exemptions, despite the vast majority of patrons hailing from Victoria.
"We've told them (Crown) that, based on how they've described it to us, we see no impediment to it proceeding," Victorian Commission for Gambling Regulation chief Peter Cohen said.
"They've sought some boundary changes to the room."
Mr Cohen revealed sections of the casino's public gaming floors were also set to increase.
But a spokeswoman for Gaming Minister Tony Robinson said last night the two rulings were unrelated.
"I've just had a few more discussions, and my understanding is that all of this is at very preliminary stages between Crown and the VCGR. And so at this point, the minister has not been formally advised of any expansion of the Mahogany Room," Rebecca Harrison said.
Mr Brumby revealed on Tuesday - just hours before the handing down of the federal Budget - that he had handed Crown 150 new tables in exchange for higher tax on the casino's poker machines.
He defended the timing of the announcement and rejected criticism that he had tried to hide the deal.
But sources suggested the agreement was signed more than 10 days ago, and its announcement delayed until Budget day.
Mr Brumby admitted to private discussions with Mr Packer at a taxpayer-funded suite at the Albert Park Grand Prix six weeks ago.
He initially refused to detail the discussions, claiming they were private, but has since said they talked about Tiger Woods' visit to Melbourne in November and not the lucrative casino deal.
Mr Packer described the talks as "casual" and unrelated to the arrangement. (Credit: Herald Sun)
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The state's gambling watchdog revealed it had given preliminary approval for Crown to expand its rich high-roller Mahogany Room.
It comes just days after Premier John Brumby announced the casino would be granted an extra 150 gaming tables in a sweetheart deal with its billionaire owner, James Packer.
The Mahogany Room expansion will see a new VIP facility built above the Crown Towers driveway at the casino's eastern end.
High-stakes roulette, blackjack and baccarat tables will cater for bets of up to $280,000.
And smoking will also be permitted under special international exemptions, despite the vast majority of patrons hailing from Victoria.
"We've told them (Crown) that, based on how they've described it to us, we see no impediment to it proceeding," Victorian Commission for Gambling Regulation chief Peter Cohen said.
"They've sought some boundary changes to the room."
Mr Cohen revealed sections of the casino's public gaming floors were also set to increase.
But a spokeswoman for Gaming Minister Tony Robinson said last night the two rulings were unrelated.
"I've just had a few more discussions, and my understanding is that all of this is at very preliminary stages between Crown and the VCGR. And so at this point, the minister has not been formally advised of any expansion of the Mahogany Room," Rebecca Harrison said.
Mr Brumby revealed on Tuesday - just hours before the handing down of the federal Budget - that he had handed Crown 150 new tables in exchange for higher tax on the casino's poker machines.
He defended the timing of the announcement and rejected criticism that he had tried to hide the deal.
But sources suggested the agreement was signed more than 10 days ago, and its announcement delayed until Budget day.
Mr Brumby admitted to private discussions with Mr Packer at a taxpayer-funded suite at the Albert Park Grand Prix six weeks ago.
He initially refused to detail the discussions, claiming they were private, but has since said they talked about Tiger Woods' visit to Melbourne in November and not the lucrative casino deal.
Mr Packer described the talks as "casual" and unrelated to the arrangement. (Credit: Herald Sun)
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Friday, May 15, 2009
Property News Media Blog: Do you support casino expansions? Tourism, entertainment industry and employment elements
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Do you support casino expansions? Tourism, entertainment industry and employment elements
Homeless now charged to stay at homeless shelters - 11th May 2009
In these dire times, even the homeless are now being charged to stay at homeless shelters.
That's the situation in New York City where city officials this month began charging rent to working families staying in public homeless shelters.
The policy stems from a 1997 state law that hasn't been enforced until now. Under that law, shelter managers started to require families to pay a portion of their income, depending on the shelter and family size, according to The New York Times newspapers.
Residents could be expected to pay up to half their earnings.
Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.
One single mother living in a Manhattan shelter tells the newspaper she got a letter saying she had to give up $336 ($A440) of the $800 ($A1050) she makes each month as a cashier.
Vanessa Dacosta makes $8.40 ($A11) an hour. She got a letter under her door at the shelter a few weeks ago saying she'd have to fork up nearly half of what she was bringing in.
For Dacosta, who pays nearly $100 ($A131) a week on child care for her 2-year-old, paying the shelter is hardly an expense she can afford.
“It’s not right,” Dacosta told the Times. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”
But the city says it's got to find a way to cover the costs of state housing aid.
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That's the situation in New York City where city officials this month began charging rent to working families staying in public homeless shelters.
The policy stems from a 1997 state law that hasn't been enforced until now. Under that law, shelter managers started to require families to pay a portion of their income, depending on the shelter and family size, according to The New York Times newspapers.
Residents could be expected to pay up to half their earnings.
Some shelter residents say the new rule will ruin their chances of saving enough money to get an apartment.
One single mother living in a Manhattan shelter tells the newspaper she got a letter saying she had to give up $336 ($A440) of the $800 ($A1050) she makes each month as a cashier.
Vanessa Dacosta makes $8.40 ($A11) an hour. She got a letter under her door at the shelter a few weeks ago saying she'd have to fork up nearly half of what she was bringing in.
For Dacosta, who pays nearly $100 ($A131) a week on child care for her 2-year-old, paying the shelter is hardly an expense she can afford.
“It’s not right,” Dacosta told the Times. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”
But the city says it's got to find a way to cover the costs of state housing aid.
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Crisis hits millionaires' row, by Chris Zappone - The Sydney Morning Herald - 15th May 2009
Australia has fewer million-dollar suburbs as the global financial crisis erodes home values, according to a report.
How did your suburb fare? Click here for the list.
The total number of suburbs where the median home price is $1 million or more fell to 134 in the year to the end of February, from 152 a year ago, according to real estate research agency RP Data, with median home prices plunging more than 20 per cent in the some suburbs.
"The top end of the market has always been seen as a bit of safe haven and has generally been immune to downturn,'' said RP Data senior research analyst Cameron Kusher, but the global financial crisis has "really impacted hard on high income earners'' resulting in the need to sell properties.
"Even through past recessions it's very rare to see these areas drop more than 20 per cent,'' Mr Kusher said.
"It is something new and something that hasn't been seen before.'' Four suburbs in Western Australia showed the average median price falling more then 20 per cent, based on monthly sales data.
New South Wales saw the largest fall in the number of million-dollar suburbs, losing eight in the year to February.
The suburb of Warrawee experienced the biggest plunge, with the median home price of $1.09 million in 2008, slumping to $895,000 in 2009.
Overall, the number of million-dollar NSW suburbs fell to 78 in 2009 from 86 in 2008, the report said.
The impact of the financial crisis, which accelerated late last year, has been driving the sales of top-end homes, Mr Kusher said.
Good times gone
Some high income-earners ''probably thought the good times would continue for a lot longer than they have,'' he said.
''They have missed out on bonuses, their share portfolios are worth half of what they were 18 months ago,'' Mr Kusher said. ''Some people have had to sell their properties.''
''Given the state of the economy, there are not a lot of people in a position to spend more than $1 million at the moment.''
Western Australia, where the economy is tied to the price and outlook of resources, saw the most rapid shrinkage of million-dollar neighbourhoods in percentage terms. The number of suburbs where the median home price was $1 million or more dropped 21 per cent, from 29 in 2008 to 23 in 2009.
The Perth suburb of Ardross led the price falls, with the median price tumbling 26.4 per cent in the year to February.
Five of Victoria's million-plus-neighbourhoods slipped under the threshold, bringing the total to 20 in 2009, a 20 per cent fall.
South Yarra lost the most, dropping 18.1 per cent, to $900,000 in 2009 from $1.1 in the twelve months to February 2008.
Queensland and South Australia both gained one-million-dollar-plus suburbs each in the year.
US price plunge
A plunge in US home prices linked to subprime loans set off the global financial crisis last year, igniting fears that drops of 20 per cent the US and UK could eventually hit Australia.
Official home prices have fallen 6.7 per cent in the year to March according to Australian Bureau of Statistics data, although unofficial measures show more resilience.
''This decline in prices, the largest since the Great Depression, comes in spite of the fact that subprime lending comprised only a tiny part of the local market while Australia never saw the overbuilding that occurred in other countries,'' wrote RBS economists Kieran Davies and Felicity Emmett in a note to clients.
''With this downward momentum now in place, as well as the prospect of a further large rise in unemployment, house prices could potentially fall further over coming months.''
The Federal Government extended the deadline for the full First Home Owners grant boost until the end of December, and in a reduced from till the end of 2009.
Economists link the resilience in sub-$500,000 home prices with the grant boost.
JP Morgan analyst Helen Kevans flagged the hazards of high risk borrowers entering the housing market ahead of an expected rise in the unemployment.
By government estimates, the jobless rate will rise to 8.25 per cent by the middle of 2010. The rate currently stands at 5.4 per cent. (Credit: The Sydney Morning Herald)
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How did your suburb fare? Click here for the list.
The total number of suburbs where the median home price is $1 million or more fell to 134 in the year to the end of February, from 152 a year ago, according to real estate research agency RP Data, with median home prices plunging more than 20 per cent in the some suburbs.
"The top end of the market has always been seen as a bit of safe haven and has generally been immune to downturn,'' said RP Data senior research analyst Cameron Kusher, but the global financial crisis has "really impacted hard on high income earners'' resulting in the need to sell properties.
"Even through past recessions it's very rare to see these areas drop more than 20 per cent,'' Mr Kusher said.
"It is something new and something that hasn't been seen before.'' Four suburbs in Western Australia showed the average median price falling more then 20 per cent, based on monthly sales data.
New South Wales saw the largest fall in the number of million-dollar suburbs, losing eight in the year to February.
The suburb of Warrawee experienced the biggest plunge, with the median home price of $1.09 million in 2008, slumping to $895,000 in 2009.
Overall, the number of million-dollar NSW suburbs fell to 78 in 2009 from 86 in 2008, the report said.
The impact of the financial crisis, which accelerated late last year, has been driving the sales of top-end homes, Mr Kusher said.
Good times gone
Some high income-earners ''probably thought the good times would continue for a lot longer than they have,'' he said.
''They have missed out on bonuses, their share portfolios are worth half of what they were 18 months ago,'' Mr Kusher said. ''Some people have had to sell their properties.''
''Given the state of the economy, there are not a lot of people in a position to spend more than $1 million at the moment.''
Western Australia, where the economy is tied to the price and outlook of resources, saw the most rapid shrinkage of million-dollar neighbourhoods in percentage terms. The number of suburbs where the median home price was $1 million or more dropped 21 per cent, from 29 in 2008 to 23 in 2009.
The Perth suburb of Ardross led the price falls, with the median price tumbling 26.4 per cent in the year to February.
Five of Victoria's million-plus-neighbourhoods slipped under the threshold, bringing the total to 20 in 2009, a 20 per cent fall.
South Yarra lost the most, dropping 18.1 per cent, to $900,000 in 2009 from $1.1 in the twelve months to February 2008.
Queensland and South Australia both gained one-million-dollar-plus suburbs each in the year.
US price plunge
A plunge in US home prices linked to subprime loans set off the global financial crisis last year, igniting fears that drops of 20 per cent the US and UK could eventually hit Australia.
Official home prices have fallen 6.7 per cent in the year to March according to Australian Bureau of Statistics data, although unofficial measures show more resilience.
''This decline in prices, the largest since the Great Depression, comes in spite of the fact that subprime lending comprised only a tiny part of the local market while Australia never saw the overbuilding that occurred in other countries,'' wrote RBS economists Kieran Davies and Felicity Emmett in a note to clients.
''With this downward momentum now in place, as well as the prospect of a further large rise in unemployment, house prices could potentially fall further over coming months.''
The Federal Government extended the deadline for the full First Home Owners grant boost until the end of December, and in a reduced from till the end of 2009.
Economists link the resilience in sub-$500,000 home prices with the grant boost.
JP Morgan analyst Helen Kevans flagged the hazards of high risk borrowers entering the housing market ahead of an expected rise in the unemployment.
By government estimates, the jobless rate will rise to 8.25 per cent by the middle of 2010. The rate currently stands at 5.4 per cent. (Credit: The Sydney Morning Herald)
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Thursday, May 14, 2009
Packer rebounds as Australia's richest, by Trevor Chappell - The Sydney Morning Herald - 14th May 2009
Gambling tycoon James Packer is Australia's richest man after a slump in the resources sector eroded the fortune of the previous wealth leader, iron-ore magnate Andrew Forrest.
Forbes Asia magazine's 2009 list of rich Australians shows Mr Packer, 41, took back the top mantle from third position.
But his estimated wealth fell to $US3.1 billion ($A4.12 billion), from $US5.3 billion in 2008, following a drop in the share prices of his casinos and media interests.
Mr Packer's interests in Australia include the Crown casino in Melbourne and the Burswood casino in Perth.
Mr Forrest, the boss of Fortescue Metals Group Ltd, crashed to fifth, after his fortune shrank to $US1.65 billion ($A2.19 billion), from almost $US5 billion, as waning China demand for iron ore caused Fortescue's shares to drop by two-thirds.
Second on the list was shopping centre developer Frank Lowy, whose wealth decreased to $US2.8 billion ($A3.72 billion), from $US4.4 billion.
Harry Triguboff, head of Australia's biggest builder of apartments, Meriton, was third with $US2 billion ($A2.66 billion), down from $US2.7 billion.
Forbes Asia said that overall, Australia's billionaires and millionaires were less wealthy than they were 12 months ago, when the global financial crisis began to bite.
The number of billionaires among Australia's 40 richest business people contracted from 16 to nine.
However, three increased their wealth.
The head of hedge fund group CQS, Michael Hintze, had $US150 million ($A199.15 million) more to roll in and was in 12th position with $US900 million ($A1.19 billion).
At number 14 was Macarthur Coal founder Ken Talbot, whose fortune grew to $US750 million ($A995.75 million), from $US620 million.
Property tycoon Maurice Alter's wealth grew by $US20 million ($A26.55 million), to $US590 million ($A783.32 million).
Forbes Asia said Australia's tycoons were also getting older, with 16 on the list of 40 aged 70 years or more.
Packaging magnate Richard Pratt, who died in April from cancer aged 78, was replaced on the rich list by his son Anthony.
Anthony Pratt, who now heads Visy Industries, was in sixth spot, with a net worth of $US1.6 billion ($A2.12 billion).
Other newcomers to the list were Reece Australia chairman Leslie Alan Wilson at 28th with $US445 million ($A590.81 million), and gaming magnate Bruce Mathieson at 36th with $US350 million ($A464.68 million).
Mining heiress Gina Rinehart remained Australia's richest woman and seventh overall with $US1.5 billion ($A1.99 billion), down from $US2.4 billion in 2008.
Forbes Asia said that for the first time since it began compiling the annual list, a New Zealander was richer than the wealthiest Australian.
Kiwi Graeme Hart's mountain of money is estimated at $US4.7 billion ($A6.24 billion), well above Mr Packer.
Mr Hart made his fortune in the paper and packaging sector. (Credit: The Sydney Morning Herald)
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Forbes Asia magazine's 2009 list of rich Australians shows Mr Packer, 41, took back the top mantle from third position.
But his estimated wealth fell to $US3.1 billion ($A4.12 billion), from $US5.3 billion in 2008, following a drop in the share prices of his casinos and media interests.
Mr Packer's interests in Australia include the Crown casino in Melbourne and the Burswood casino in Perth.
Mr Forrest, the boss of Fortescue Metals Group Ltd, crashed to fifth, after his fortune shrank to $US1.65 billion ($A2.19 billion), from almost $US5 billion, as waning China demand for iron ore caused Fortescue's shares to drop by two-thirds.
Second on the list was shopping centre developer Frank Lowy, whose wealth decreased to $US2.8 billion ($A3.72 billion), from $US4.4 billion.
Harry Triguboff, head of Australia's biggest builder of apartments, Meriton, was third with $US2 billion ($A2.66 billion), down from $US2.7 billion.
Forbes Asia said that overall, Australia's billionaires and millionaires were less wealthy than they were 12 months ago, when the global financial crisis began to bite.
The number of billionaires among Australia's 40 richest business people contracted from 16 to nine.
However, three increased their wealth.
The head of hedge fund group CQS, Michael Hintze, had $US150 million ($A199.15 million) more to roll in and was in 12th position with $US900 million ($A1.19 billion).
At number 14 was Macarthur Coal founder Ken Talbot, whose fortune grew to $US750 million ($A995.75 million), from $US620 million.
Property tycoon Maurice Alter's wealth grew by $US20 million ($A26.55 million), to $US590 million ($A783.32 million).
Forbes Asia said Australia's tycoons were also getting older, with 16 on the list of 40 aged 70 years or more.
Packaging magnate Richard Pratt, who died in April from cancer aged 78, was replaced on the rich list by his son Anthony.
Anthony Pratt, who now heads Visy Industries, was in sixth spot, with a net worth of $US1.6 billion ($A2.12 billion).
Other newcomers to the list were Reece Australia chairman Leslie Alan Wilson at 28th with $US445 million ($A590.81 million), and gaming magnate Bruce Mathieson at 36th with $US350 million ($A464.68 million).
Mining heiress Gina Rinehart remained Australia's richest woman and seventh overall with $US1.5 billion ($A1.99 billion), down from $US2.4 billion in 2008.
Forbes Asia said that for the first time since it began compiling the annual list, a New Zealander was richer than the wealthiest Australian.
Kiwi Graeme Hart's mountain of money is estimated at $US4.7 billion ($A6.24 billion), well above Mr Packer.
Mr Hart made his fortune in the paper and packaging sector. (Credit: The Sydney Morning Herald)
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Wednesday, May 13, 2009
Crown expansion plan draws fire from critics, by Sarah-Jane Collins and Jason Dowling - The Sydney Morning Herald - 13th May 2009
Crown Casino has been granted its biggest expansion in gambling capacity since opening at its Southbank location more than a decade ago, in a deal attacked yesterday by campaigners for responsible gaming.
The casino, now one of the biggest in the world, will be able to increase its number of gambling tables by more than 40 per cent to 500 tables.
"Clearly the casino is being treated as the primary and first citizen of the state, with privileges that are really a cosy deal without the rest of the community having any say," the Reverend Tim Costello said.
The Victorian Gaming Minister, Tony Robinson, said the Government had agreed with Crown to alter their licence agreement to allow for 150 extra gaming tables and an expansion of the gaming floor. In exchange, Crown will pay about 10.5 per cent extra in poker machine taxes, bringing it into line with other pokie machine operators across Victoria. The increase will be implemented in 1.7 per cent increments over six years.
"This is bringing the tax that they pay on their poker machines up to the level that is paid by other entities across the state, so it's a good deal for taxpayers," Mr Robinson said.
He said allowing the expansion would ensure Crown remained the first choice casino destination in Australia.
"If people ultimately want to have the boiled sweets experience of casinos, let them go to Sydney. If they want the rolled gold dark chocolate experience they're going to keep coming to Melbourne and we're going to ensure that."
Gary O'Neill, from Crown Casino, said the deal meant Crown would be able to keep up with growing rivals in Macau and Singapore. "The new mega complexes are very big. They will be very competitive and they will compete for the tourist dollar in this part of the world."
Mr O'Neill said the gaming floor at Crown would expand but final approval for an expansion rests with the Victorian Commission for Gambling Regulation.
Mark Zirnsak, from the Interfaith Gambling Taskforce described the expansion as appalling. "This, coming at a time when there's a global financial crisis, it's going to push more Victorians into being in hardship and vulnerable," he said.
Dr Zirnsak said the deal pointed to the "very cosy relationship between the Government and Crown".
"There's been no consultation on this expansion, which we believe there should have been, and the timing is indeed appalling," he said.
He said Crown did not need an expansion to remain competitive. "They've got a monopoly [in Victoria] and most of their patrons aren't millionaires flying in from overseas. They are locals," he said.
But he said he supported the increase in pokies taxes.
The Opposition's gaming spokesman, Michael O'Brien, said Mr Robinson had waited until budget day to announce the deal in an attempt to bury a bad decision. "Labor is clearly embarrassed by this gambling boost and tax grab, as it should be." (Credit: The Sydney Morning Herald)
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The casino, now one of the biggest in the world, will be able to increase its number of gambling tables by more than 40 per cent to 500 tables.
"Clearly the casino is being treated as the primary and first citizen of the state, with privileges that are really a cosy deal without the rest of the community having any say," the Reverend Tim Costello said.
The Victorian Gaming Minister, Tony Robinson, said the Government had agreed with Crown to alter their licence agreement to allow for 150 extra gaming tables and an expansion of the gaming floor. In exchange, Crown will pay about 10.5 per cent extra in poker machine taxes, bringing it into line with other pokie machine operators across Victoria. The increase will be implemented in 1.7 per cent increments over six years.
"This is bringing the tax that they pay on their poker machines up to the level that is paid by other entities across the state, so it's a good deal for taxpayers," Mr Robinson said.
He said allowing the expansion would ensure Crown remained the first choice casino destination in Australia.
"If people ultimately want to have the boiled sweets experience of casinos, let them go to Sydney. If they want the rolled gold dark chocolate experience they're going to keep coming to Melbourne and we're going to ensure that."
Gary O'Neill, from Crown Casino, said the deal meant Crown would be able to keep up with growing rivals in Macau and Singapore. "The new mega complexes are very big. They will be very competitive and they will compete for the tourist dollar in this part of the world."
Mr O'Neill said the gaming floor at Crown would expand but final approval for an expansion rests with the Victorian Commission for Gambling Regulation.
Mark Zirnsak, from the Interfaith Gambling Taskforce described the expansion as appalling. "This, coming at a time when there's a global financial crisis, it's going to push more Victorians into being in hardship and vulnerable," he said.
Dr Zirnsak said the deal pointed to the "very cosy relationship between the Government and Crown".
"There's been no consultation on this expansion, which we believe there should have been, and the timing is indeed appalling," he said.
He said Crown did not need an expansion to remain competitive. "They've got a monopoly [in Victoria] and most of their patrons aren't millionaires flying in from overseas. They are locals," he said.
But he said he supported the increase in pokies taxes.
The Opposition's gaming spokesman, Michael O'Brien, said Mr Robinson had waited until budget day to announce the deal in an attempt to bury a bad decision. "Labor is clearly embarrassed by this gambling boost and tax grab, as it should be." (Credit: The Sydney Morning Herald)
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Tuesday, May 12, 2009
Thursday, May 07, 2009
National shopping spree brings predictions of a short and mild recession - Fairfax - 7th May 2009
Treasurer Wayne Swan and Prime Minister Kevin Rudd have received a ringing endorsement of their $20 billion series of "cash splashes" in a four-month shopping spree unmatched in the developed world.
The Age - 7th May 2009
Treasurer Wayne Swan and Prime Minister Kevin Rudd have received a ringing endorsement of their $20 billion series of "cash splashes" in a four-month shopping spree unmatched in the developed world.
Retail sales figures for March show a jump of 2.2 per cent in seasonally adjusted spending, more than compensating for a dive of 2 per cent in February.
Since the first stimulus payout in December, retail spending has risen by an extraordinary 4.5 per cent, a result unmatched in the United States where spending fell 2.5per cent, New Zealand (down 1.7 per cent) and Canada and Japan (both down 3.1 per cent).
Only in Britain among other developed countries did spending increase in those four months and that was by 1.6 per cent, less than half of the Australian rise.
Australians spent a seasonally adjusted $76.6 billion in the four months after the stimulus payments, more than in any four months in history.
Economists interviewed yesterday expected the good news to continue.
"We've got every reason to think sales will maintain decent momentum going forward," said ICAP Securities economist Adam Carr.
"The second stimulus package has only started to hit consumers, ensuring that retail sales are likely to remain buoyant over the next couple of months," said CommSec economist Savanth Sebastian.
The $8.7 billion December stimulus handout was followed by $4 billion in March and $7billion last month.
A belief the stimulus payments were being spent is one reason the Reserve Bank board decided at its meeting on Tuesday to leave interest rates unchanged.
Reserve Bank forecasts to be released tomorrow will show the bank is expecting Australia to return to economic growth at the end of the year after what would have been one of the mildest recessions on record.
The bank's view was endorsed by the International Monetary Fund, which predicted the Australian economy would return to growth in 2010 after shrinking 1.1 per cent this year.
In a strong endorsement of economic management in Australia and New Zealand, the fund's Regional Outlook for Asia and the Pacific said this was due to "strong policy response, healthy financial sectors and exchange rate depreciation".
Treasurer Wayne Swan accepted the compliment but noted the report also highlighted the effect of the global recession on Australia's customers including Japan, South Korea and Taiwan.
Mr Swan welcomed the retail trade news, saying the Coalition had to explain why it had opposed the measures.
At the National Press Club, Opposition Leader Malcolm Turnbull said it was unsurprising that if "you handed out billions in one hit, some of it will be spent".
"Yes, it has had an impact on retail sales figures, but it was very little bang for a very big buck. If you want to spend government money on stimulating the economy, you should spend it on infrastructure." (Credit: Fairfax)
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The Age - 7th May 2009
Treasurer Wayne Swan and Prime Minister Kevin Rudd have received a ringing endorsement of their $20 billion series of "cash splashes" in a four-month shopping spree unmatched in the developed world.
Retail sales figures for March show a jump of 2.2 per cent in seasonally adjusted spending, more than compensating for a dive of 2 per cent in February.
Since the first stimulus payout in December, retail spending has risen by an extraordinary 4.5 per cent, a result unmatched in the United States where spending fell 2.5per cent, New Zealand (down 1.7 per cent) and Canada and Japan (both down 3.1 per cent).
Only in Britain among other developed countries did spending increase in those four months and that was by 1.6 per cent, less than half of the Australian rise.
Australians spent a seasonally adjusted $76.6 billion in the four months after the stimulus payments, more than in any four months in history.
Economists interviewed yesterday expected the good news to continue.
"We've got every reason to think sales will maintain decent momentum going forward," said ICAP Securities economist Adam Carr.
"The second stimulus package has only started to hit consumers, ensuring that retail sales are likely to remain buoyant over the next couple of months," said CommSec economist Savanth Sebastian.
The $8.7 billion December stimulus handout was followed by $4 billion in March and $7billion last month.
A belief the stimulus payments were being spent is one reason the Reserve Bank board decided at its meeting on Tuesday to leave interest rates unchanged.
Reserve Bank forecasts to be released tomorrow will show the bank is expecting Australia to return to economic growth at the end of the year after what would have been one of the mildest recessions on record.
The bank's view was endorsed by the International Monetary Fund, which predicted the Australian economy would return to growth in 2010 after shrinking 1.1 per cent this year.
In a strong endorsement of economic management in Australia and New Zealand, the fund's Regional Outlook for Asia and the Pacific said this was due to "strong policy response, healthy financial sectors and exchange rate depreciation".
Treasurer Wayne Swan accepted the compliment but noted the report also highlighted the effect of the global recession on Australia's customers including Japan, South Korea and Taiwan.
Mr Swan welcomed the retail trade news, saying the Coalition had to explain why it had opposed the measures.
At the National Press Club, Opposition Leader Malcolm Turnbull said it was unsurprising that if "you handed out billions in one hit, some of it will be spent".
"Yes, it has had an impact on retail sales figures, but it was very little bang for a very big buck. If you want to spend government money on stimulating the economy, you should spend it on infrastructure." (Credit: Fairfax)
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