Melco Resorts & Entertainment said Thursday that it is currently in discussions with potential buyers of its stake in Philippines integrated resort City of Dreams Manila and will soon have a shortlist of interested parties that will partake in a bidding process.
The update follows the company’s announcement in February that it was exploring strategic alternatives for the property as part of a new “asset light” philosophy. City of Dreams Manila is a joint venture with local real estate firm Belle Corp.
Asked for an update during its 1Q25 earnings call, Melco’s Executive Vice President and CFO Geoff Davis said, “We continue to run the process with the advisors. Potential buyers are signing NDAs (non-disclosure agreements) in the virtual data room and are working through a series of questions. And over time we will whittle down that group to a short list for the bidding process. We remain in close dialogue with our advisors.”
The planned sale of Melco’s Manila stake comes amid ongoing weakness in the Philippines market – a stark contrast to growth the company is experiencing elsewhere and particularly in Macau.
Following release of its Q1 results on Thursday, Melco said it had continued to enjoy impressive year-on-year gains through April and the recent May Day Golden Week holiday.
Property visitation had grown by 30% compared with last year’s Golden Week period while mass drop at City of Dreams Macau was up by 20%, according to Chairman and CEO Lawrence Ho.
Notably, the company said it believes the contrast of its high-end offering at City of Dreams Macau and the more mass-focused Studio City has it well placed to capitalize on a market that has “fundamentally changed”.
“I think our products have held up very well with all the hard work between the teams at both City of Dreams and Studio City,” said Ho.
“Studio City successfully repositioned during and post-COVID and with City of Dreams now reopening House of Dancing Water, I think we found our groove again and have rediscovered our identity.
“Having House of Dancing Water, having the family water park and other non-gaming attractions at Studio City, those are in our opinion enough to attract a very broad customer base.”
Asked to elaborate on the observation of Macau’s market dynamics, Melco said the trend was particularly notable in the non-gaming segment where the move towards a mass market is observable through retail spending.
“On a relative basis, Studio City from a retail standpoint fares better in this environment because of the retail mix in that property, which is mass focused and pretty affordable with more consumable type items,” explained Davis.
“In terms of City of Dreams, where it’s really targeted at high-end luxury retail, that category continues to struggle. I don’t think that we’re struggling more than other operators, but I think across the board, that area continues to be challenged this year.”
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