[COM] SkyCity Adelaide Casino Expansion | 55m | 12 Levels | Hotel

[Nort]

Water features in that section of the Torrens are something that keeps on coming up in various riverbank precinct proposals, so even if it doesn't happen as part of the casino itself I fully expect to see them at some point.

[ml69]

Were water features decided to be added in the final plan? That is something which is highly impressive in my eyes and not present in Adelaide.

They are not even close to a final plan yet, all Skycity have done is release concept drawings. Given that they have reached regulatory agreement with the government, we should expect a serious proposal for DAC approval this year.

[Shahkar]

Were water features decided to be added in the final plan? That is something which is highly impressive in my eyes and not present in Adelaide.

They are not even close to a final plan yet, all Skycity have done is release concept drawings. Given that they have reached regulatory agreement with the government, we should expect a serious proposal for DAC approval this year.

Oh god! Really? I have been under the wrong impression for a long time then Thanks for that Nort and ml69! Well I certainly hope they do add water features

[ml69]

I would rather see water features such as a Bellagio-style fountain on the Torrens itself (night-lit of course) which would draw people to the riverfront, and provide an attraction to stimulate outdoor dining and vibe.

I don't think the current masterplan proposal of a mist fountain is enough of an attraction to bring people to the riverfront.

[pushbutton]

To be as good as Crown Casino it would have to at least have cinemas, lots of shops, nightclubs, and 2 food courts plus other entertainment and spectacular water and fire features. So far I haven't seen any suggestion that they're even thinking of such things.

From what I understand there is a proposal to include cinemas as part of the redevelopment (or in a seperate redevelopment altogether of the Adelaide Railway Station Building itself). I am sure that the expansion will include nightclubs and eateries at the ground level, with the expanded casino and hotel rooms located in the levels above - it's pretty stock standard for casinos these days, new or existing ones being redevelope, to include other attractions than just being purely a casino.

Sounds promising then, but ideally I'd like to see something better than stock standard. Still though, if it did include those things then it would represent a significant improvement on what's there now.

[Howie]

Confirmation of 2014 start and 2016 completion.

SkyCity's high stakes Adelaide gamble
Saturday 26 January 2013

An artist's impression of the SkyCity Adelaide casino development, which is aimed at attracting more high-rollers to the tables.

SkyCity Entertainment Group's A$350 million riverside Australian development is forecast to increase annual pre-tax earnings by A$62 million in five years.

Morningstar analyst Nachi Moghe predicted A$3 billion annual VIP turnover from Adelaide in 2018, generating A$41 million revenue.

The Auckland-based company's deal was transformational and once its Australian push was completed the gaming business would enjoy a significant jump in revenue, Moghe said.

"We forecast Adelaide's ebitda to increase by A$62 million on an incremental basis by 2018, implying a post-tax return on investment of 10.5 per cent which will rise to 18.3 per cent by 2022.

"We are increasing our valuation to $4.70 per share, mainly driven by Adelaide's expansion and the roll-forward of our earnings model.

"Consequently the stock appears undervalued compared to our intrinsic value," he said, putting an accumulate recommendation out until the share price gets to $4.23.

SkyCity, with a market capitalisation of $2.3 billion, has been trading up at $3.99 although Moghe said the entire expansion would be funded by debt so gearing would rise from 2.3 times ebitda to 2.4 times in 2016 before trending downwards.

"This is within the company's banking covenants of 2.7 times," he said, projecting net after-tax profit of $146.8 million from $894.1 million revenue in 2013, rising to $164.7 million on revenue of $1 billion by 2015.

The redevelopment will run from 2014-16 and the addition of new gaming machines and tables will dramatically change the revenue mix in favour of premium VIP customers.

About 200 electronic gaming machines will initially be installed, then a further 305 machines with an extra 110 tables.

The existing casino's archaic coin-based gaming system, higher taxes on electronic gaming machines and the lack of restaurants and bars meant VIP players shunned it, Moghe said.

New VIP areas would be modelled on Auckland's Horizon suite with about 16 tables. That had been a big success, instrumental in boosting VIP revenues from $26 million in 2011 to $51 million last year.

Problem Gambling Foundation chief Graeme Ramsey said SkyCity was unable to expand its casino operations in New Zealand so it was no surprise it looked to other jurisdictions.

Moghe remained bullish about Auckland, which generates 60 per cent operating profit, noting how the Government's blanket ban on new casino licences meant SkyCity faced little competition.

"This has allowed the company to operate at very healthy profit margins and generate abundant cash flows. Judicious investments are being considered to lift growth in the longer term."

Moghe also remained hopeful SkyCity would expand its presence in Auckland, predicting an increase of 70c a share if it wins the right to build the National Convention and Exhibition Centre. SkyCity shares closed down 2c yesterday at $3.98.


Adelaide ambitions

• Existing casino to be expanded.
• 150-room, six-star boutique hotel.
• Celebrity restaurants by 2016.
• VIP gaming suites and salons.
• Reconfigure existing building to add 200 new machines.
• New building for 305 machines, 110 tables.

Source: Morningstar Equity Research

[Waewick]

[how good is he]

Looking forward to see what celebrity restaurants will be.....hopefully they can attract some good ones....any thoughts on who?

[skyliner]

With all these developments along the river (the oval, the bridge, casino, convention centre, new Royal Adelaide Hospital, the research centre, the tramline, electrification and redevelopment of Adelaide railway yards, the riverbank ideas and Uni SA developments) it is seeming like a shift in the centrality of the CBD is taking place towards the station/river. Perhaps what Webb so ambitiously designed back in the 1920's will indeed be far more active and, with electrification, greatly contribute to an economic upturn in the city. There is just a note of excitement about.

ADELAIDE - TOWARDS A GREATER CITY SKYLINE

[pushbutton]

So according to that they'll be adding nothing whatsoever to enhance the enjoyment of ordinary people living in Adelaide (or visiting it) and wanting some fun.

[Pants]

I wish this forum was around when Dazzleland was proposed. It would have given me great joy to see you happy at a proposal. I'm surprised the built-in amusement park model hasn't been used more since though, given how well it worked out for Myer.

[mattblack]

I invite anyone to slap me with a wet fish the day that 'pushbutton' finds some fun in his life. Cant see it happening any day soon unless he moves to Disneyland and is surrounded by roller coasters 24/7 and wakes to breakfast in bed with Mini Mouse.

[monotonehell]

To be fair to pushbutton, this proposal only mentions more pokies (moving from coin operated), some VIP facilities, putting back the tables they took out in the past to fit in all the pokies they put in (which is nice). There's no mention of alternative entertainments other than the "celebrity restaurants" and a boutique hotel, which isn't really an entertainment.

[Shahkar]

Surely they wouldn't spend that much money and not add more entertainment?

[ml69]

Surely they wouldn't spend that much money and not add more entertainment?

In my opinion, I wouldn't expect anymore entertainment facilities than has already been stated. Similar casino redevelopments in Australia such as Crown Perth ($500M+) and Star City in Sydney ($800M+) both feature luxury hotels, VIP gaming facilities, celebrity/signature restaurants, nightclubs and bars like the Skycity proposal (perhaps with some token luxury retail stores) but that's about it.

Don't expect cinemas, amusement parks, theatres etc.