Genting Set to Sell Undeveloped Miami Land for $1.22B
Malaysian-based conglomerate and casino resort operator Genting Group agreed this week to a deal to sell its 15.47 acres of land in Miami, Florida.
The operator had been planning to build a casino and resort on the Biscayne Bay site since 2011. However, it struggled to gain local authority approval for the project, and the land was announced as up for sale in 2022.
A consortium of local real estate developers known as SmartCity Miami LLC was the winning bidder at $1.225 billion. When the transaction completes, it is expected to be the highest-value urban real estate purchase in Florida’s history.
“This is a prized piece of real estate in the heart of one of the world’s most dynamic and fastest-growing cities, and we are honored to have been selected as the property’s next owner,” said David Martin, CEO of SmartCity investors Terra Group.
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Genting first bought the land, which was previously the site of the Miami Herald newspaper’s offices, for $236 million in 2011.
It planned to build a Miami Resorts World casino and hotel on the site. As part of its attempts to woo local government, the operator even proposed funding a new $700 million metro monorail line in the area.
However, in the end, a combination of factors killed Genting’s proposed casino. Not least of which was the opposition of the influential Seminole Tribe, owners of the international Hard Rock brand.
Although it did not build its casino, Genting still stands to make a hefty return on the land. Even when factoring in potential costs of $255 million over the 12 years of ownership, it is poised to reap $966 million from the sale.
Despite receiving nine offers from all over the world, including five of more than one billion dollars, Genting seemed to respect local bidders the most.
“There were lots of attractive elements in SmartCity’s bid, but above all, their deep understanding of – and commitment to – smart development in Miami made them by far and away the best choice,” said Kevin Jones, SVP at Genting Americas.
SmartCity’s bid also lets them keep some of the land, too, with Genting holding on to 10 acres on the west side of the site near Biscayne Boulevard.
The “new partnership with SmartCity will lead to real benefits for the residents of Miami,” Jones added.
However, any profits Genting does make off this sale will probably not be sitting idle for long. The international casino operator currently runs Resorts World New York, a slots-only venue in Queens, New York, that is soon expected to receive one of three new casino licenses in the state’s downstate area.
This would mean a massive upgrade to the site for a full casino experience, all at some expense.
“We do not expect a special dividend, as the unlocked capital is already earmarked. Genting Malaysia is bidding for a New York table gaming license, and the projected capital expenditure is US$1 billion,” analysts from investment bank JP Morgan told The Edge Markets.
Genting may have to wait a while for the cash, however, as the land sale is not expected to be completed until Q4 2023.