Macau Construction Business Overview28 August 2018
Macau is close to Hong Kong and also is one of the most densely populated regions in the world. With the completion of the Hong Kong-Zhuhai-Macau Bridge within sight, the land connection between Hong Kong and Macau will become even closer, and Macau’s economic potential will also increase accordingly. If we can seize this opportunity, it will be of great benefit to local Macau companies or foreign investments.
According to the statistics from the Statistics and Census Service of Macau, by the end of May 2018, the total number of tourists visiting Macau was more than 27.04 million, which has a significant impact on the local economy of Macau, including the promotion of Macau’s economic transformation. Even if the status of the gaming industry as its leading industry is difficult to change in the short term, the Macau government will still gradually realize multiple economic strategies on this basis. For example, building Macau into a world tourism and leisure center. Therefore, a large number of infrastructure projects will be launched respectively to meet relevant development strategies.
In fact, following its 2017 Policy Address, Macau will continuously strengthen the construction of supporting facilities for tourism and will focus on promoting the construction of budget hotels, integrated shopping malls, and theme parks to cater tourists from around the globe. According to the data of the first quarter of the Land, Public Works & Transport Bureau of Macau in 2018, a total of 47 hotel projects are under construction or in the design stage which will provide 12,750 guest rooms, while 430 blocks of buildings, including residential, commercial and office, providing 21,954 units.
Also, the Macau SAR Government has continued to invest in infrastructure and construction projects, as well as increasing the supply of land and housing, including public housing and urban construction. These projects will not only create new jobs for the local construction industry but also bring investment opportunities to Macau and its neighboring regions.
In addition, since the six gambling licenses will expire in 2020 and 2022 respectively, in order to pass the stringent thresholds by the Macau SAR Government, authorities encourage Casino Operators to away from being too reliant on gambling revenue. In response to such changes, Gaming Groups tend to upgrade or remodel their existing premises by introducing innovative technology, leisure, culture and recreation elements to demonstrate their contribution to the industry and society. This will create a large number of jobs in renovation, alterations & additions works, remodeling and improvement works in the coming 2-3 years.
Apart from that, the Chinese government has also made a definite deployment of Macau's integration into the “Belt and Road” in the “Vision and Action for Promoting the Co-Construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road” as early as 2015, one of which was "To deepen the cooperation between Hong Kong, Macau and Taiwan, create a better Guangdong, Hong Kong and Macau Bay Area". Therefore, the economic development of Macau is inseparable from its "Belt and Road" neighbor - Hong Kong.
Asia Allied Infrastructure Holdings Limited (the Group) has taken root in Hong Kong for 50 years. In addition to actively consolidating its core business in its homeland, it has also grasped infrastructure development opportunities under the “Belt and Road Initiative”, actively explored appropriate targets for equity investment to build business presence and invested in construction-related companies with high growth potential among the “Belt and Road” countries. Recently, the Group has acquired certain equity interests of a well-known Macau-based construction company Ng Kam Kee Construction Co., Ltd., which not only helped the Group expand its market share in Macau's construction market by using Ng Kam Kee's industry network and platform, but also laid an essential foundation for its development in the Greater Bay Area.
We believe that the construction industry in Macau has great potential for growth, as countless large-scale infrastructures, hotels, and residential projects are in full swing in Macau, and it is believed that the number of fixed assets invested by Macau in infrastructure projects including government, private and gaming companies will continue to be maintained at a relatively high level. Most importantly, the Chinese government has continued to vigorously support the development of the “Belt and Road” and the “Greater Bay Area” Initiative, which can be seen that there will be substantial opportunities for Macau and its development will create new heights in the future.