CBRE Experts Bullish on Wynn Resorts’ Al Marjan Island Project

Wynn Al Marjan Island, Wynn Resorts’ much-anticipated luxury resort in Ras Al Khaimah, United Arab Emirates (UAE) is currently under development. The resort represents an investment close to $4 billion with Wynn’s share being around $900 million.

The new luxury resort is expected to bring economic stimulus to the region while granting Wynn unique growth opportunities. Industry experts also share this opinion and have recently highlighted the impact of Wynn Al Marjan Island on the UAE.

As announced by IAG, experts with CBRE Institutional Research recently acknowledged the importance of the multi-billion-dollar project for the region, outlining it is expected to generate gaming revenues close to $1.4 billion annually.

Per the experts, Wynn’s integrated resort (IR) project is expected to generate annual gross gaming revenues of $1.38 billion. At the same time, Wynn Al Marjan Island’s net revenues are expected to hit $1.8 billion. CBRE outlined the predictions in a report called “United Arab Emirates: The next gaming frontier.”

Industry experts John DeCree, Max Marsh, Colin Mansfield and Connor Parks spoke about the exceptional potential of the integrated resort. “We have seen consensus forming in the mid-30% property margin range for Wynn Al Marjan Island and other IRs in the UAE,” they explained.

Lack of Competition Is Likely Going to Benefit the Project

But it’s not only the potential of the resort that is expected to make it successful. CBRE’s analysts said that the expected tax rate and gambling regulations are likely going to position the UAE resort as a rival of long-term gambling markets such as Las Vegas and Singapore. They spoke about the lack of competition, predicting significant growth for Wynn’s property.

“However, with an expected tax rate and regulatory regime that would rival Singapore and Las Vegas, relatively favorable labor conditions (compared with quotas in Macau and unions in Las Vegas), and virtually no competition, we would expect operating margins to be more akin to Singapore (50% range) than Las Vegas,“

explains a report released by CBRE Institutional Research

According to the experts, Wynn is expected to benefit from a free cash flow of approximately $356 million by 2030, thanks to its investment in the IR. On the other hand, the Earnings Before Interest, Taxes, Depreciation, Amortization, Rent and Management Fees are expected to be in the range of $921 million per year.

Although the experts said that the property is expected to “stabilize” within three years, they acknowledged this process may be expedited. A prime reason for the quick turnaround is likely going to be the lack of competition in gaming and the millions of visitors expected every year.