By Linda Stafford
In SA this week, Kerzner International CEO Butch Kerzner confirmed that the company has become a major player in the UK gaming, entertainment and hotel arena. And it has "the projects, people and capital" to produce about US$3,5bn of new international developments within three years. New York-listed Kerzner, whose core business is Atlantis casino-resort on Paradise Island in the Bahamas, has been selected to develop and operate a casino and hotel on the site of London's famous white elephant, the Millennium Dome.
This is part of a huge project to upgrade Greenwich Peninsula that also includes a 20 000-seat entertainment and sports arena. Kerzner went up against international gaming giants such as MGM and Caesars to be appointed preferred developer and manager of casino, hotel and entertainment facilities in northwesterly Manchester, England, and Glasgow, Scotland. The company has just announced, too, that it will develop a destination casino-resort in Morocco, 85 km southwest of Casablanca, with two local partners.
A year ago Kerzner formed a joint venture with the Dubai government to develop Atlantis, The Palm. A $1,1bn resort and water theme park, it will be at the centre of The Palm, Jumeirah, a $1,5bn land-reclamation project. Its partner in Dubai has since acquired a 12% stake in Kerzner at a slight premium of $50/share. Kerzner was in Johannesburg this week to check on progress at the Technikon Witwatersrand's new School of Tourism & Hospitality, to which his father, Sol, and the company donated R20m.
Created to train a new generation of hospitality and tourism industry professionals, the initiative came on the heels of the Kerzners' announcement in November of a site for the first SA One&Only hotel at Cape Town's V&A Waterfront. Outlining group plans in the medium term, Butch Kerzner says: "What we now have are projects totalling $3,5bn under intensive planning, which will quadruple the size of our company within three years."
The projects fall into three categories - destination resorts (the Atlantis brand and one-offs), one-of-a-kind luxury hotels (One&Only) and gaming. Kerzner laid claim to the UK gaming licence that allowed it to go head-to-head against the big boys through the acquisition in 2002 of a stake in beleaguered London Clubs International. Ahead of deregulation in the British market, Kerzner snapped up some £10m of loan notes, acquiring 30% of the group's bonds (long-term debts). "We recently sold these back to London Clubs," says Kerzner, "but held on to one of its small casinos in Northampton, which gave us a licence."
The three UK casino developments, still subject to the passing of gaming legislation, are all part of major regional regeneration projects. For instance, the one in Scotland is part of the Scottish Exhibition & Conference Centre, a redevelopment of Queens Dock, Glasgow. The UK casino and hotel developments are expected to cost about $1,2bn and to be completed by 2007. The project in Morocco, says Kerzner, "will be along the lines of our other destination casino-resorts such as Sun City". Kerzner had nothing new to report about the expansion of the One&Only brand in SA, other than that the company was still on the lookout for sites in the bush and, perhaps, Johannesburg.
"My dad is involved in the planning of the one at the Cape Town waterfront," he says. "True to our promise, we will be bringing a very different luxury product to SA." A promise to breathe new life into the mothballed £800m Millennium Dome, one of the fiascos of Tony Blair's Labour government, may be harder to keep.
Publisher: Financial Mail
Source: Financial Mail
Kerzner International confirmed that the company has become a major player in the UK gaming, entertainment and hotel arena.
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