GENTING Bhd : Complementary theme park project in southern Johor

Genting had recently indicated that it may spend RM200m to build a theme park and hotel in southern Johor to compliment its flagship high-end retail outlet in southern Johor based on the Chelsea Premium outlet concept. Earlier, the Genting group via its 54.7% subsidiary, Genting Plantations and US listed Simon property group, had formed a 50:50 JV called Genting Chelsea Sdn Bhd to invest in and operate Premium Outlet centres in Malaysia. The relatively small initial investment sum of RM200m for the theme park and hotel vs Genting Highlands’ annual maintenance CAPEX of RM300m p.a alone, suggests that scope, scale and diversity of the attractions of this proposed venture is unlikely to pose any competitive risk to RWS. In fact, the proposed investment could be seen as a complementary to RWS by possibly expanding the captive tourism pool in Southern Johor for RWS to tap on.

Genting plans Iskandar hub

The Johor hub is expected to help facilitate two-way visitor flows between its Resorts World Genting development in Pahang and its soon-to-open integrated Resorts World Sentosa. Genting group plans to set up a hub in Iskandar Malaysia, Johor, that will feature a mall with premium outlets in the first phase and, later, hotels and a theme park. The hub in Johor is expected to be a mid-way point to help facilitate two-way visitor flow between its Resorts World Genting development in Pahang and its soon-to-open integrated resort in Singapore, Resorts World Sentosa. The proposed project in Iskandar has been approved by both the state and federal governments .The mall, to be known as Chelsea Premium Outlet, will be operated jointly with US firm Simon Property Group and will be the anchor of the whole project. It is expected to open next year. On the other hand, it is reported that Genting is also looking at a number of investment opportunities in the US (BT)

Thought of the Week

This week, the Census Bureau announced that business inventories rose 0.4% in November- a second consecutive increase following 13 months of decline. In 3Q09, the BEA's measure of real private inventories(used in calculating GDP) fell at a breakneck pace of $139.2 billion. Bringing this decline in inventories to a
halt could boost GDP growth by more than 4 percentage points if achieved in one quarter. While data differences ean that this may not be fully realized in 4Q09, the monthly data increase the likelihood that 4Q09 GDP, due out on January 29, will show an economy growing by 5% or more.