Feb 20 (Reuters) - MGM Resorts International Chairman Jim Murren said he has been approached by potential buyers for the Crystals luxury mall in its $8.5 billion Las Vegas CityCenter joint venture complex.
“CityCenter is always looking for ways to improve the value for its shareholders ... and I think the most attractive candidate down the road would be Crystals,” Murren told analysts on a conference call.
“We’ve gotten a bunch of inquiries over the last six months. Crystals could raise a tremendous amount of money for its owners,” Murren told Reuters, referring to the mall that is home to high-end retailers including Jimmy Choo, Hermes, Harry Winston and Gucci.
MGM Resorts reported quarterly earnings earlier on Wednesday. Its shares fell 1.6 percent to close at $12.54 on the New York Stock Exchange.
CityCenter, a city-within-a-city jointly owned by MGM Resorts and Dubai World Corp, has struggled since opening in late 2009 amid Las Vegas’ downturn. But analysts believe that MGM, which competes with Las Vegas Sands Corp and Wynn Resorts Ltd, is finally turning the corner on the costly project.
One of the biggest privately financed developments in the United States, the 67-acre complex took five years to build. When it opened, it expanded Las Vegas’ hotel and retail inventory at a time when visitation was falling sharply.
Murren said MGM was not in negotiations yet but expected CityCenter to reach its full potential over the next couple of years, and that selling Crystals had always been a goal.
“CityCenter’s higher cash-flow days are upon us. Its (Crystals) growth rate is very appealing and it has trophy assets. It’s a very appealing asset at a time when real estate investments are becoming more coveted.”
MGM Resorts said CityCenter posted fourth-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) of $68 million, up 17 percent from a year earlier.
Crystals had 2012 net revenue of $54 million and cash flow of $32 million, up from 2011 net revenue of $46.3 million and cash flow of $24 million.
The heavily leveraged casino operator, which had more than $12 billion in debt in late 2012, announced $5 billion in new financing in December that is helping to cut interest costs.
Like many of its competitors, MGM plans to expand further in China’s Macau gambling region, but it relies more heavily than Las Vegas Sands and Wynn on the Las Vegas strip for its survival.
The Las Vegas Convention and Visitors Authority said 2012 was a record year, with about 40 million visitors, surpassing the 2007 record of 39.2 million.