MGM Osaka backed by ‘long-term demand’, capable of ‘stable cash flows’: partner Orix

The MGM Osaka project (pictured in an artist’s rendering), Japan’s first integrated resort (IR) with casino, is among physical assets supported by “long-term demand” and capable of “generating stable cash flows”, according to Orix Corp, the main Japanese partner of MGM Resorts International in the casino resort scheme. The JPY1.51-trillion (US$9.67-billion currently) MGM Osaka is due to open in late 2030. MGM Resorts and Japan’s Orix Corp are the two main partners in the consortium developing MGM Osaka, with the casino firm controlling a 43.5-percent stake. The project also involves a number of other Japanese businesses as minority investors. The casino resort project is managed by Orix’s infrastructure business unit, which also oversees business domains including environment and energy, aircraft and ships, real estate, and public infrastructure. “Each business is distinct, yet they share a common core: identifying investment opportunities, enhancing value, and improving profitability through operations,” said Shuji Irie, chief operating officer for the group’s infrastructure business unit, as cited in a report. He also added: “Likewise, all are real, physical assets supported by long-term demand, and are capable of generating stable cash flows.” Orix’s approach for capturing new investment opportunities does not involve expand “indiscriminately into completely unfamiliar areas”, but instead moving into “adjacent areas” where the group could leverage its existing strengths, Mr Irie stated. “If a market shows growth potential and is a domain where we can create value, we will actively take on the challenge. Building on these efforts over time will lead to new growth opportunities. The Osaka IR project is one such example of this approach,” he added. “By bringing together the knowledge and experience we have gained across our businesses – including investment in real assets, business operations, and collaboration with partners – we are taking on the challenge of creating new long‑term value,” Mr Irie said. In its second-quarter earnings call conducted on July 29, MGM Resorts’ president and chief executive, Bill Hornbuckle, said the MGM Osaka remained “on time and on budget as the only licensee in Japan”, a project that was the “greatest greenfield opportunity in the world”. At the same occasion, MGM Resorts’ chief financial officer, Jonathan Halkyard, said the casino firm had at that point spent approximately US$600 million on the Osaka project. He added that MGM Resorts expected to deploy about US$1 billion in each of 2027 and 2028, the time when the group would have fully completed its capital commitments.