BY FLORENCE CHONG
AS the world's largest gambling groups began to stake claims in Macau, Tom Ashworth and Martin Tacon decided to try their luck elsewhere.
Instead of casinos, the partners launched an opportunity fund in 2006 to invest in high-end residential, retail and commercial property in Macau to capitalise on the boom in gambling.
The Macau Property Opportunities Fund made its debut on the London Stock Exchange three weeks ago.
The trust was first listed on AIMS, the second board in London, and the managers chose to move it to the main board to widen the shareholder base and boost its turnover.
Riding on the back of the gambling boom in Macau, the value of the five assets owned by the trust rose to $US313 million ($349m).
Mr Tacon, a director of Sniper Capital, which manages Macau Opportunity Fund, said its largest asset was a residential tower in the prestigious One Central project on Macau's waterfront.
One Central was jointly developed by Hong Kong Land and Shun Tak, controlled by Patsy Ho, daughter of long-term Macau investor Stanley Ho. Mr Tacon said the project offered luxury accommodation -- a part of the market previously missing in Macau -- for expatriates drawn to the city's strong economy.
Such was the demand for quality housing, most of the apartments had been sold within two weeks of their release in 2006, Mr Tacon said.
The developers sold about 700 of the 800 units in the seven towers before the global financial crisis savaged the residential market, reaping $HK6 billion from the sales. The sale price of luxury apartments in Macau has doubled in the past two years to about $HK4500 ($646) per square metre.
Mr Tacon said the fund had started to lease apartments, which were setting new rental standards in quality and rents.
Tenants were paying up to $HK40,000 weekly for two-bedroom apartments in One Central.
The trust had leased 10 of the 59 apartments in the second quarter, with several more tenancies under negotiation.
Mr Tacon said Macau had the fastest-growing economy in the world, with some pundits forecasting growth of up to 14 per cent this year.
Gambling revenue reached $US15bn last year and retail sales grew 30 per cent.
Aaron Fischer, gambling analyst with CLSA, a Hong Kong investment bank, part of Credit Agricole, said revenue growth in Macau was "phenomenal" and was continuing to exceed expectations.
"May revenues increased 95 per cent off a relatively high base," Mr Fischer said, adding that revenues were now three times those of Las Vegas.
"Revenue growth over the last eight months has been averaging around 60 per cent."
He said Macau gambling revenue would increase by 100-200 per cent over the next four years, while supply would increase by only 15 per cent.
Groups such as Melco PBL, a joint venture between James Packer and Lawrence Ho which ran City of Dreams, had sharply improved their performance, Mr Fischer said.
Two more projects were in the pipeline, he said, with another two or three expected, bringing thetotal additional investment to between $US5bn and $US10bn.
Las Vegas-based Sheldon Adelson, who has the largest exposure to Macau, has been quick to build on the early success of his first two casinos: Sands Macau and Venetian Macau.
His gambling group, Las Vegas Sands, has two more hotels under construction on the Cotai Strip, expected to be completed within 18-24 months.
CLSA said Las Vegas Sands, which last year listed its Macau operations, known as Sands China, on the Hong Kong Stock Exchange, had submitted plans to the Macau government for three more integrated resorts on five remaining sites.