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The MGM Osaka project, Japan’s first integrated resort with a casino, is among physical assets supported by long-term demand and capable of generating stable cash flows, according to Orix Corp, the main Japanese partner of MGM Resorts International in the casino resort scheme.
The JPY1.51-trillion (US$9.67-billion currently) MGM Osaka is due to open in late 2030.
MGM Resorts and Japan’s Orix Corp are the two main partners in the consortium developing MGM Osaka, with the casino firm controlling a 43.5% stake. The project also involves a number of other Japanese businesses as minority investors.
Infrastructure Business Approach
The casino resort project is managed by Orix’s infrastructure business unit, which also oversees business domains including environment and energy, aircraft and ships, real estate, and public infrastructure.
Shuji Irie, chief operating officer for the group’s infrastructure business unit, said each business is distinct, yet they share a common core of identifying investment opportunities, enhancing value, and improving profitability through operations.
He also added that all are real, physical assets supported by long-term demands and are capable of generating stable cash flows.
Investment Strategy
Orix’s approach for capturing new investment opportunities does not involve expanding indiscriminately into completely unfamiliar areas, but instead moving into adjacent areas where the group could leverage its existing strengths, Mr Irie stated.
If a market shows growth potential and is a domain where they can create value, they will actively take on the challenge. Building on these efforts over time will lead to new growth opportunities. The Osaka IR project is one such example of this approach, he added.
By bringing together the knowledge and experience they have gained across their businesses, including investment in real assets, business operations, and collaboration with partners, they are taking on the challenge of creating new long-term value, Mr Irie said.
Project Timeline And Budget
In its second-quarter earnings call conducted on July 29, MGM Resorts’ president and chief executive, Bill Hornbuckle, said the MGM Osaka remained on time and on budget as the only licensee in Japan, a project that was the greatest greenfield opportunity in the world.
At the same occasion, MGM Resorts’ chief financial officer, Jonathan Halkyard, said the casino firm had at that point spent approximately US$600 million on the Osaka project. He added that MGM Resorts expected to deploy about US$1 billion in each of 2027 and 2028, the time when the group would have fully completed its capital commitments.
Partnership Structure
MGM Resorts controls a 43.5% stake in the consortium developing MGM Osaka. Orix Corp serves as the main Japanese partner in the casino resort scheme.
The project also involves a number of other Japanese businesses as minority investors. The JPY1.51-trillion (US$9.67-billion currently) MGM Osaka is due to open in late 2030.
The casino resort project represents Japan’s first integrated resort with a casino. MGM Resorts and Orix Corp are the two main partners in the development consortium.
Capital Deployment Plans
MGM Resorts had spent approximately US$600 million on the Osaka project at the time of the July 29 earnings call. The casino firm expected to deploy about US$1 billion in each of 2027 and 2028.
The group would have fully completed its capital commitments by the end of 2028. The JPY1.51-trillion project is due to open in late 2030.
MGM Resorts’ president and chief executive described the project as the greatest greenfield opportunity in the world. The casino resort remained on time and on budget as the only licensee in Japan.
Long-Term Value Creation
Orix’s infrastructure business unit manages the casino resort project alongside other domains, including environment and energy, aircraft and ships, real estate, and public infrastructure.
The group’s approach focuses on identifying investment opportunities, enhancing value, and improving profitability through operations. All assets are supported by long-term demand and capable of generating stable cash flows.
The Osaka IR project exemplifies Orix’s strategy of moving into adjacent areas where the group can leverage existing strengths. The project demonstrates the group’s commitment to creating new long-term value through real asset investments.
Source: GGR Asia
