The Osaka authorities have reportedly confirmed that the first integrated resort in this region will be opened in the summer of 2030 to cast away the speculations about an earlier launch of the luxurious property set to bring massive income. As reported by GGRAsia, the initial investment costs of the project have meanwhile risen by JPY190 billion (US$1.29 billion) thus seemingly indicating extensive works to be done within the time frame of seven years.
The main feasibility concerns reportedly refer to the artificial island of Yumeshima as the location where the resort will be built by multiple partners led by MGM Resorts, Oryx and the Osaka city officials. As reported, the development has been estimated to be generating around US$3.6 billion in annual revenues upon the launch. For this reason, the commissioning of the infrastructural projects related to the Osaka IR development, such as Osaka Metro, have been sped up to bring the Yumeshima project completion closer.
Plan Revision Increases Investments
But, according to the source, the plans are now revised and the works are set to complete by summer 2030 rather than in 2029 which was announced earlier as an option for the long-expected launch. The same announcements reportedly included the JPY1.08 trillion (US$7.33 billion) investment projected when the bid for the resort was accepted by the Osaka authorities. These costs are now reported as growing to JPY1.27 trillion (US$8.62 billion) which represents a 17.6% or US$1.29 billion higher investment estimate than the initial one.
Equity Portion Changes Await Approval
GGRAsia also reports that the latest plan revision also referred to the funding for the resort and rose the equity part JPY530 billion to about JPY720 billion (US$4.89 billion), with the increase to be borne by the leading two partners. But MGM and Oryx’s shares will reportedly increase from 40 percent each to 42.5 percent each while the minority investors’ collective share will reduce from 20 percent to 15 percent. As reported, the new draft plan will keep the loan portion already set at JPY550 billion (US$3.73 billion).
The revised draft reportedly awaits approval of the Japanese government.
Development Proves Initial Estimates
With the latest revision, the project has reached the investment level of US$8.62 billion to exceed the initial estimates targeting the US$ 7.33 billion value. The update reportedly provided by the local Second Capital Promotion Bureau jointly governed by Osaka prefecture and Osaka city is thus bringing the estimates closer to the MGM Resorts’ projections referring to the Osaka Integrated Resort venture as a US$10-billion project from the beginning of the deal.
The IR District Development Plan for Osaka was agreed in April 2022 between Osaka city and Osaka prefecture from one side, and MGM Resorts International, Japan’s Orix Corp, and some smaller investors from the other.