A buzz is being generated by the opening of Marina Bay Sands (MBS) and Resorts World at Sentosa (RWS). In this report, we explore the potential economic implications and, in the process, identify the gainers and losers. We expect this theme to play out in 2H09.

Our recent meetings with the management of Genting and Las Vegas Sands have reinforced our optimism on the potential spin-offs from the two integrated resorts. We believe these two behemoth developments will bring good fortune to Singapore. To start with, the resorts complement one another: MBS targets business travelers while RWS targets families. Second, Singapore’s excellent connectivity and close proximity to a growing regional gaming market is one big plus. Third, China’s travel restrictions to Macau and Singapore’s much lower gaming tax regime could make Singapore the ‘destination’.

Property markets in Macau, Sydney and Melbourne enjoyed a multiyear boom following the liberalization of gaming. History could repeat itself in Singapore, albeit in a moderate manner. We think the benefits will be contained at the high-end segment, with inflows of high-net-worth money. Hawkish measures will limit any price run-up in mass-market homes. The government needs to ensure mass-market homes remain affordable. As such, high-end property developers like SC Global and Wheelock stand to gain more than mass-market property developers.

Tourists are expected to come in droves, filling up hotel rooms as more attractions are added to the skyline. Hoteliers – CDL Hospitality Trusts, Hotel Properties, Pan Pacific and Fragrance – and SIA stand to gain. Budget hotel operator Fragrance could see more bookings from cost-conscious travelers. Interior designer Kingsmen, which specializes in the design and production of exhibits for conventions, could participate in some of the international conventions that could come to Singapore. Consumer names like Breadtalk and FJ Benjamin could see brisk sales.

The remaking of Singapore is set to attract more tourism revenues, auguring well for the retailers. However, this will be offset by an influx of retail space (+20% by end-2010) that could exert downward pressure on retail rental.