Planned Integrated Resort in South Korea’s Midan City Losing Ground

Posted on: March 21, 2022, 06:37h. 

Last updated on: March 21, 2022, 12:25h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

South Korea has several integrated resorts (IR) in various stages of development. All have had to alter their timetables for completion, and one, by R&F Korea, just received a 12-month extension.

Midan City IR
R&F Korea’s Midan City IR in South Korea under construction. The project development is going to take longer, as delays take hold. (Image: Asian Gaming Brief)

It has been a long, hard road for the expansion of South Korea’s gaming scene in Midan City. COVID-19 forced project delays, as companies scrambled to cover their costs. Mohegan Gaming and Entertainment pushed back its plans several times before announcing last year that it has a solid plan in place.

Another project is facing time and money crunches as well. R&F Korea (RFKR) is losing ground – both literally and figuratively – with its Midan City IR plans.

Gaming Development Slows

At one point, Caesars Entertainment wanted an IR in South Korea. However, it began to get cold feet, and early last year, it backed out. Its then-partner, Guangzhou R&F Properties, purchased its 50% stake and moved forward with the project through RFKR, its local South Korean arm.

RFKR has had issues of its own and approached South Korea’s Ministry of Culture, Sports and Tourism (MCST) in February for an extension. It hoped for a delay until March 2024. But the agency only gave it one year more to complete the IR.

Part of the reason for the delay stems from finance trouble at Guangzhou R&F. However, the MCST added a condition to that extension. It authorized more time, but only if RFKR agreed to spend another 5% on the project.

RFKR has already stated that it will likely request another extension a year from now. In the meantime, it is exploring ways to raise additional capital for the IR. One idea is that it is willing to sell some of the land that it purchased in Midan City for the project. It hasn’t stated how much or if it has begun negotiations for a potential deal with any buyers.

Guangzhou R&F recently unloaded around 1.4 million square feet of property it controlled in London’s Nine Elms area. The property went for $124.8 million to Hong Kong-based company Far East Consortium. But this was around $90 million less than it was worth.

In December of last year, the company picked up $540 million through a deal with Blackstone Group. It sold the investment company the last 30% of its stake in a 242-acre tract of logistics property it owned in China’s Guangzhou province.

Midan City Well Behind Schedule

Initially, Midan City, a development project located on Yeongjong Island in Incheon’s Free Economic Zone, was to begin welcoming gaming elements in 2020. However, operators have had difficulty staying on track. Only around 25% of the casino complex is in place but isn’t ready to begin offering entertainment.

Some 60% of the land that was set aside for development remains untouched, unable to attract attention from potential buyers and developers. Projections now are that the first properties won’t be ready until 2025.

That could change. With interest waning in the Russian Far East and the evolving environment in Macau, new destinations will become potential targets. Countries like South Korea, Singapore, and Vietnam will likely see more growth.