The Philippines subsidiary of global casino operator Melco Resorts & Entertainment has reached an agreement with its local partner, Belle Corp, which will see it provided with rental concessions for City of Dreams Manila of up to Php3.73 billion (US$77 million) for 2020 and 2021.
Details of the agreement formed part of the FY20 financial results of Melco’s parent company, Melco International Development Ltd, which this week reported a loss of US$1.6 billion in 2020 due to the impact of the COVID-19 pandemic.
Signed on 22 March 2021, the agreement between Melco Resorts Leisure (PHP) Corporation and Belle Corp provides for adjustments to the rental payments paid and payable by Melco Resorts Leisure, which incorporate rent concessions of approximately PHP2.06 billion (US$42 million) for 2020 and up to Php1.67 billion (US$35 million) for 2021. The concessions will be recognized in 2021 and over the remaining terms of the lease until July 2033, in accordance with applicable accounting standards, Melco said.
Belle Corp owns the land and buildings that comprise City of Dreams Manila, which it leases to Melco Resorts & Entertainment (Philippines) via its 78.7%-owned subsidiary Premium Leisure Corp (PLC). Belle Corp also earns a share of revenues from City of Dreams Manila.
Although it is yet to release its full financial results for 2020, Belle Corp had reported revenue from its lease agreement with Melco of Php2.0 billion (US$41 million) for the nine months to September 2020, plus Php325 million (US$6.7 million) from its share in gaming revenues.
In 2019 Belle Corp reported gaming share of Php2.98 billion (US$61 million), while revenue from the Melco lease agreement was Php2.67 billion (US$55 million).
City of Dreams Manila has currently suspended all operations until at least 4 April after the Philippines government imposed Enhanced Community Quarantine over Metro Manila and adjacent provinces on 27 March.
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