INVEST IN SAIPAN
Get 15% stabilized rental yield and 25% IRR for 3 years
- Economy - Saipan, the nearest US Territory to Asia, has become a growing tourist destination supported by phenomenal growth of 300% besides the game changing gaming industry taking off by Imperial Pacific Resort casino in 2015 (HKex 1076 market cap HKD18bn).
- Tourism - The number of outbound Chinese tourist arrivals is set to reach 220 million by 2020.
- Infrastructure – Increase to 150 flights per weekly from major cities in China(48% based on arrivals), Korea(40%) and Japan(12%).
- Employment Growth - Imperial Resort Casino and Plumeria Golf Resort on the island set to create number of hotel and casino jobs by 7000+.
- Housing – Lack of supply and new construction since 1990s added by economic growth impetus make buying now a compelling factor.
- Investment Opportunity – Increasing demand for real estate with visitation growth and labor needs. This represents a huge opportunity for real estate player(offices, hotel operators, residential investments(especially worker accommodation) on the island.
With CNY anticipated to further depreciate and the USD bond yield to continue to fall, China investors with abundant liquidity are keen on quality overseas investment opportunities overseas
The new Vegas and Macao?
- Imperial Pacific’s Casino – soft opened in July 2015 and Grand Opening in July 2017 expanded to 80 VIP tables.
- January’s unaudited VIP gambling rolling chip volume rose 147% year-on-year to an all-time monthly high of USD5.59 Billion.
- Phase I Grand Mariana Casino and Hotel scheduled to open in 1Q2017, comprising of a 16-story hotel tower with 350 hotel suites, and 15 villa suites.
- Projection of 200+ tables and 400 slots.
- Research analysts are estimating that the VIP turnover in Saipan will amount to ~50% of Las Vegas in 2017.
- Visa-free policy for Chinese visitors, with increased flight routes into Saipan from gateway cities.
- Imperial Pacific to continue investing in Saipan with Phase II (an integrated resort) expected to open in succession in 2018 / 2019 totaling in USD7 billion.
Favorable Tax Regime
The CNMI has one of the lowest effective corporate income tax rates in the world and that is the lowest tax jurisdiction on US soil. Overall tax rates are 10%-15% less than the US federal tax rate.
Note: The above tables are only for reference and should not be deemed to be complete or as tax advice. Investors are recommended to seek advice from independent tax advisors.
Tourism set for Exponential Growth in Near Future
- Saipan is the main and most important tourist destination in CNMI due to exponential economic growth.
- The number of tourist arrivals is set to increase exponentially in the next few years with increase of flights to 120 per weekly.
- By 2020, this figure is set to reach ~3,200,000.
- In addition, with the Imperial Resort Casino and Plumeria Golf & Casino Resort on the island set to come on line, the number of hotel and casino jobs is projected to increase by 7000+ in tandem.
- This presents a huge opportunity for hotel operators and residential housing investments on the island.
Well Positioned to Cater the Outbound Chinese Market
- China is now the clear originator of visitors, experiencing over 300% growth since 2011.
- Korea’s growth has been more in line with overall visitation growth taking 40% of market share, and may see more growth in the near future increased flight capacity taking up 55+ flights per weekly.
- Japanese continues to provide steady investment and visitation taking 12% of the market share.
- Since 2014, GDP growth has been 4.5% and sustainable.
- During the past five years, tourists in Saipan grow at an annualized rate of 9% on average and reached 480,000 in 2015.
- Benefiting from Saipan’s favorable weather, proximity location and its visa-on-arrival policy to Chinese citizens, number of Chinese visitors tripled in the past 4 years with a CAGR of 40.6% p.a.
Lacks of Hotel Rooms Both in Quantity and Quality
- There are currently only 20 rated hotels on the island of Saipan with a total of <3000 rooms.
- The availability of hotel rooms is the key parameter for airlines considering adding flight and supply of luxury hotel rooms is very limited, 5-star hotel rooms only account for ~10% of total supply to Saipan.
- Over the next 12-18 months, we expect three new luxury hotels to open in Saipan, which together will increase the supply of luxury hotel rooms on Saipan by 1,015 rooms (+38%).
- Currently there is a shortage of accommodations in Saipan, with visitors demand outstripping market supply.
Source: Marianas Visitors Authority, HANMI, Tripadvisor
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