27 October 2015
ASX Market Announcements Australian Stock Exchange Exchange Centre Level 6 20 Bridge Street Sydney NSW 2000 Australia
Dear Sir/Madam
RE: SKYCITY ENTERTAINMENT GROUP LIMITED (SKC) SKYCITY appoints contractor for New Zealand International Convention Centre and Hobson St Hotel
Please find attached our announcement relating to the above.
Yours faithfully
Peter Treacy
Company Secretary For personal use only use personal For
SKYCITY Entertainment Group Limited Federal House 86 Federal Street PO Box 6443 Wellesley Street Auckland New Zealand Telephone +64 (0)9 363 6141 Facsimile +64 (0)9 363 6140 www.skycitygroup.co.nz
27 October 2015
SKYCITY appoints contractor for New Zealand International Convention Centre and Hobson St Hotel
SKYCITY has today announced the next major milestone in the development of the New Zealand International Convention Centre (NZICC) with the appointment of Fletcher Construction as the main contractor for the NZICC and Hobson St hotel projects.
Please find attached a Media Release & Investor Presentation which provides further information and detail on the announcement.
Nigel Morrison, Chief Executive Officer, and Rob Hamilton, Chief Financial Officer, of SKYCITY, intend to hold an analyst and investor teleconference call at 2pm NZT (12pm noon AEDT) today to discuss the key points of the announcement. There will also be a brief opportunity for questions during the call.
You can participate in the call by dialling one of the following numbers:
Location Number Location Number Location Number
Australia 1800 801 825 Ireland 1800 720 105 Sweden 0207 968 70
Australia – +61 (0)2 8524 5042 Italy 800 875 577 Switzerland 0800 837 001 Sydney
Belgium 0800 784 01 Japan 0120 271 900 Taiwan 0080 1615 189
Canada 1855 842 3490 Malaysia 1800 816 107 Taiwan – Taipei +886 2 7708 3282
China 4001 200 539 Netherlands 0800 0234 240 Thailand 001800 613 61433
France 0800 916 599 New Zealand 0800 452 905 United Kingdom 0800 015 9725
Germany 0800 1899 399 Norway 800 11 518 United Kingdom +44 (0)20 3078 7622
Hong Kong 800 905 927 Philippines 1800 1110 1347 United States 1855 298 3404
Hong Kong +852 5808 3202 Singapore 800 616 3222 US – New York +1 631 5142 526
India 000 800 100 8255 Singapore +65 6823 2299
Indonesia 00180 301 91840 South Korea 00798 6136 1434
After dialling in you will be greeted by the operator and asked for the CONFERENCE ID. Once this has been quoted, you will then be asked for your name, company and the country you are calling from.
CONFERENCE ID: 3295132 For personal use only use personal For
We would ask that you dial in to the conference 5 to 10 minutes before the call is scheduled to take place. The call will be closed off at 2pm NZT and we will not accept late entrants.
If you wish to ask a question, please dial *1 to join the question queue (you may do this at any time during the call). If you wish to cancel your question and leave the queue, dial *2.
A replay will be available approximately 2 hours after the conclusion of the conference call (ie. after 4pm NZ time / 2pm AEDT).
To access the replay, dial a telephone access number (listed below) and enter the replay passcode followed by the “#” key.
Replay Dial in Number (1800) 1800 008 585
Replay Dial in Numbers (Sydney) +61 2 9641 7900
Replay Dial in Numbers (Melbourne) +61 3 9226 0870
Replay Dial in Number (Int’l) See below for specific International Toll Free country access
Location Number Location Number
Belgium* 0800 11 797 Malaysia 1800 181 061
Canada 1866 4783 460 Netherlands 08000 232 153
China 4001 842 240 New Zealand 0800 444 310
Denmark 8088 1373 Philippines 1800 1110 1875
France 0800 904 160 Singapore 800 616 2127
Germany* 0800 181 3763 South Africa 0800 993 543
Hong Kong 800 966 697 South Korea 00798 612 1058
India 000 800 100 6647 Sweden* 020 792 274
Indonesia 0018 0306 12086 Switzerland* 0800 564 016
Ireland 1800 511 665 Taiwan 00801 232 352
Italy 800 784 706 UK 0800 169 7301
Japan 0066 3386 1031 USA 1866 846 0868 Replay Passcode 3295132
Replay Availability 7 Days Replay End 29/10/15 23:59 AEDT
Date
For more information on the content of this announcement please contact:
Investors Media
Ben Kay Kelly Armitage Investor Relations & Corporate Group Communications Manager Development Manager DDI: +64 9 363 6368
For personal use only use personal For DDI: +64 9 363 6067 Email: [email protected] E-mail: [email protected]
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MEDIA RELEASE 27 October 2015
SKYCITY and Fletcher Construction form partnership to build New Zealand’s International Convention Centre and hotel
$700m investment in Auckland tourism infrastructure
Partnership: The new NZICC and Hobson Street hotel will be built together, resulting in a construction project worth $700m and creating at least 1000 construction jobs over 3 years.
SKYCITY Entertainment Group and leading New Zealand construction contractor Fletcher Construction have announced a partnership to build the New Zealand International Convention Centre and a new 5-star hotel.
In a major milestone towards the landmark development becoming a reality, SKYCITY Chief Executive Nigel Morrison announced SKYCITY has agreed the terms of a binding, $477m contract with Fletcher Construction Company Ltd to build and complete the design of the NZICC, the 5-star, 300-room Hobson Street hotel, the retail laneway linking Nelson and Hobson streets, and 1327 carparks under the NZICC.
The parties are confident the work can begin by Christmas.
For personal use only use personal For The construction projects will create at least 1000 jobs during their 38-month build, plus approximately 1140 positions across conventions, hospitality, retail, gaming and food and beverage once both the NZICC and the new hotel are operational.* Including all other associated costs, including land, fit-out, and contingencies, the projects represent a $700m total investment by SKYCITY in the Auckland economy.
The NZICC is one of the most significant building projects in Auckland since the construction of the Sky Tower – also built by Fletcher Construction – 18 years ago.
Fletcher Construction will build the 32,000 sqm convention centre and a new 300-room, 5-star luxury hotel simultaneously, providing a huge boost to the local construction market and kick-starting a five-year inner-city building boom estimated at putting $6 billion into the local economy.**
Building boom for Auckland
Transformation: The view from Nelson Street looking down the laneway to the Hobson Street hotel. The project will transform a derelict area of Auckland’s CBD into a lively precinct for locals and visitors alike, kicking off a major building boom for Auckland.
SKYCITY and Fletcher Construction have entered into a binding commitment letter which records the agreed commercial and legal terms of the building works contracts for the NZICC and Hobson Street hotel.
Formal signing of the two building works contracts is expected in November, once a small number of outstanding matters have been satisfied, including finalising insurance and specific requirements under the NZICC Agreement with the NZ Government.
Fletcher Construction is New Zealand’s leading construction contractor. It is a division of Fletcher Building, one of New Zealand’s largest publicly-listed companies, which has been in operation since 1909.
Mr Morrison says the agreement with Fletcher Construction was a huge step for both For personal use only use personal For SKYCITY and the NZICC project, and signified the beginning of a new phase in the planning of the tourism and infrastructure facility.
“Today is a watershed moment for SKYCITY. This day has been years in the planning. I’m delighted to able to announce this construction partnership with Mark Adamson from Fletcher Building and his construction team, who share our bold and exciting vision for this project,’’ he says. Fletcher Building CEO Mark Adamson says he is excited at the opportunity to again work with SKYCITY on another landmark building for New Zealand.
“This is an amazing building and a huge opportunity. Fletcher Construction has a long association with SKYCITY dating back to the Sky Tower 18 years ago, so I’m honoured that SKYCITY has chosen us to be a key part of bringing this project to life.’’
First look inside Auckland’s newest hotel
Kiwi design: Architects say the 300-room hotel’s interior (above) will be uniquely New Zealand – while the building’s exterior (below) reflects the landscape it is grounded in.
The architects and designers working on the NZICC have continued to refine the design of the building, to further anchor the building in its New Zealand context. They have released new images, including a first look inside the Hobson Street hotel.
Andrew Barclay, Principal of Warren and Mahoney Architects and Design Director for the NZICC, says that as the Convention Centre is constructed, New Zealanders will see the building develop into a powerful expression of our country's identity.
“Every aspect of the design, from an open transparent and welcoming facade, to fluid public spaces and the use of natural materials, has been carefully chosen to reflect the essence of New Zealand. When it opens this building will be an authentic New Zealand experience and a built embodiment of Kiwi hospitality for which New Zealand is famed,“ he says.
For personal use only use personal For Construction to begin by the end of 2015
Connected: The Hobson Street hotel will be connected to both SKYCITY and the International Convention Centre. The building’s exterior is uniquely New Zealand.
The agreement between SKYCITY and Fletcher Construction follows Auckland Council’s ratification of the streamlined design of the NZICC agreed to with the Crown in May this year. SKYCITY now has all the resource consents in place it requires to begin construction.
SKYCITY has agreed with the Crown to spend at least $430m constructing the NZICC, in return for a range of gaming concessions including the extension of its Auckland licence through until 2048.
Mr Morrison says latest indications were the company would spend $471m on the NZICC, plus an additional $159m on the new hotel and $73m, most of which is on the new laneway, airbridge, retail fit out and additional carparking. The company was still considering options for financing the hotel.
The NZICC will be the largest purpose-build convention centre in the country, capable of hosting conventions of around 3000 people, or one-off events of up to 4000 people on the exhibition floor. It will also be able to host multiple events at the same time.
The NZICC’s exhibition hall alone will be five times larger than the current largest
For personal use only use personal For exhibition hall in the country – SKYCITY Convention Centre’s New Zealand Room.
A new laneway similar to Federal Street between the new hotel and the NZICC will also be created, providing quality food and beverage outlets and a new public space.
The city’s economic development agency, Auckland Tourism, Events and Economic Development (ATEED), which supports the development of an international convention centre for Auckland, has welcomed the announcement of Fletcher Construction.
“Having an Auckland-based business confirmed as the infrastructure partner for the build of a project of this scale will generate new local jobs and money in Auckland’s economy,” says Chief Executive, Brett O’Riley.
“In addition to the infrastructure opportunity the NZICC supports the growth of the business events industry for Auckland – which aims to significantly grow the sector from $236 million of direct spend to Auckland in 2013 to $430 million by 2023. Auckland Convention Bureau, a division within ATEED, is already fielding interest in a venue suited to staging large scale conferences, “ he says.
ENDS QUICK FACTS
NZICC 32,000sqm GFA (Gross Floor Area) floor space Five times larger than the current largest convention facilities in New Zealand Capable of hosting conferences of around 3000 people and one-off events of around 4000 people 24 meeting rooms Building and façade designed with ‘Kiwi’ identity 1327 car parks Adjacent laneway with exciting retail and food and beverage options 38-month build time Anticipated opening in 2019
Hobson Street hotel 300 rooms, 5-star Average room size 28-32 sqm Contemporary architecture Linked to NZICC, laneway, and main SKYCITY complex
* Based on SKYCITY estimates of positions in the NZICC, plus hotel operations, carparking, gaming, food and beverage facilities in the new laneway, and contracted and third-party services. ** National Construction Pipeline report no.3, July 2015
IMAGES AND VIDEO:
Hi-res images and video for publication with this story are available on request.
Video includes:
• Before and after comparison showing how the site will be transformed. • Interview with Nigel Morrison, CEO SKYCITY Entertainment Group • Interview with Mark Adamson, CEO Fletcher Building • Fly-through video of the New Zealand International Convention Centre and hotel. • Interview with Andrew Barclay, NZICC Design Director, Warren and Mahoney Architects
For personal use only use personal For For more information please contact:
Kelly Armitage Ben Kay Group Communications Manager Investor Relations & Corporate DDI: +64 9 363 6368 Development Manager Mobile: +64 27 213 5625 DDI: +64 9 363 6067 E-mail: [email protected] E-mail: [email protected]
Project Update: NZICC and Hobson St Hotel
Investor
Presentation For personal use only use personal For
27 October 2015 Introduction
SKYCITY and leading New Zealand construction contractor Fletcher Construction have announced a partnership to build the New Zealand International Convention Centre (NZICC) and the new 5-star, 300-room Hobson St hotel
In a major milestone towards the landmark development becoming a reality, SKYCITY Chief Executive Nigel Morrison announced SKYCITY has agreed the terms of a binding, $477m contract with Fletcher Construction to build and complete the design of the NZICC, the hotel, the retail laneway linking Nelson and Hobson streets, and 1327 car parks under the NZICC
The NZICC will be a landmark and iconic building for Auckland, enabling New Zealand to host major international conventions for around 3,000 delegates
SKYCITY’s total expenditure on the NZICC and Hobson St hotel projects will be ~$700m – a significant investment in the future of Auckland and commitment to economic growth in New Zealand
These projects will create an estimated 1,000 jobs during construction and around 1,140 jobs across conventions, hospitality, retail, gaming and food and beverage once the For personal use only use personal For NZICC and hotel are operational
2 Key Project Highlights
Fletcher Construction appointed as main contractor for the NZICC and Hobson St hotel projects following a competitive tender process
Agreed commercial terms provide significant risk protection for SKYCITY
Expect to commence construction of the NZICC by the end of 2015 and targeting completion of the NZICC and Hobson St hotel in Q1 2019
Total project costs are consistent with previous market guidance
Total capital expenditure of $635m over FY16 to FY20, including Hobson St hotel and activation of gaming concessions
Expect to activate the gaming concessions under the NZICC Agreement over the next month
SKYCITY remains confident that the NZICC and Hobson St hotel projects will be value- enhancing for shareholders
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Main Contractor – Fletcher Construction
Fletcher Construction chosen as the main contractor appointed for both projects following a competitive tender process
Fletcher Construction is New Zealand’s leading building contractor
. Very experienced in managing large construction projects
. Previously developed SKYCITY Auckland site, the Sky Tower and the Grand Hotel
. Division of Fletcher Building, one of New Zealand’s largest listed companies
SKYCITY and Fletcher Construction have entered into a binding commitment letter which records the agreed commercial and legal terms of the building works contracts for the NZICC and Hobson St hotel
Formal signing of the two building works contracts is expected to occur in November once a small number of outstanding matters have been satisfied, including finalising insurance and specific requirements under the NZICC Agreement with the NZ Government
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Key Terms of Building Works Contracts
Agreed commercial terms provide significant risk protection for SKYCITY
NZICC Building Works Contract Hotel Building Works Contract
NZICC, underground car park, laneway and Scope Hobson St hotel (excluding basement) hotel basement
Based on developed design endorsed by NZ Design Based on preliminary design Government 38 month construction period from signing Developed contemporaneously with NZICC Timing Financial incentives to complete on-time Financial incentives to complete on-time 90% of construction costs fixed or capped 88% of construction costs fixed or capped under GMP contract under GMP contract
Remaining 10% represented by provisional Remaining 12% represented by provisional Costs sums within SKYCITY’s control sums within SKYCITY’s control Cost savings shared between SKYCITY and Cost savings shared between SKYCITY and Fletcher Construction Fletcher Construction
Budget includes appropriate contingencies Budget includes appropriate contingencies
For personal use only use personal For Comprehensive building works, public liability Comprehensive building works, public liability Insurance and professional indemnity cover and professional indemnity cover
5 Project Timetable
Nov 2015 Sign NZICC and Hobson St hotel building works contracts Activate gaming concessions
Dec 2015 Commence construction of NZICC
H2 2017 Commence construction of Hobson St hotel (above ground)
Q1 2018 Targeted completion of NZICC car parks
Q1 2019 Targeted completion of NZICC and Hobson St hotel
Q2 2019
Soft opening of NZICC and Hobson St hotel, followed by official opening For personal use only use personal For
6 Total Project Costs
Total project costs consistent with previous market guidance and include appropriate contingencies
SKYCITY intends to complete the NZICC and Hobson St hotel within the project budget
NZ$m Spent to Date Still to Spend Total
NZICC 94 378 471
Laneway, Additional Car Parks, Other 10 64 73
Total (excluding Hobson St hotel) 103 441 544
Hobson St hotel 19 140 159
Total (including Hobson St hotel) 122 581 703 For personal use only use personal For
7 Future Capital Expenditure Profile
Total capital expenditure of $635m over FY16 to FY20, including activation of gaming concessions
NZ$m FY16 FY17 FY18 FY19 FY20 Total
NZICC, Laneway, Additional Car 37 107 192 100 5 441 Parks, Other Activation of Gaming 54 - - - - 54 Concessions
Total (excl. Hobson St hotel) 91 107 192 100 5 495
Hobson St hotel 2 34 81 21 2 140
Total (incl. Hobson St hotel) 93 141 273 121 7 635 For personal use only use personal For
8 Project Funding
SKYCITY is well placed to fund the NZICC and Hobson St hotel projects from future operating cash flows and additional debt funding
Following the recent $125m NZ bond issue, SKYCITY now has over $300m of committed undrawn bank facilities – sufficient headroom to fund the NZICC and Hobson St hotel projects
As signalled in the FY15 results announcement, SKYCITY will provide an update on its long-term funding plan once the Adelaide expansion project is finalised
. Currently expect the Adelaide expansion project to cost around A$300m
. Expect to confirm details of the funding plan over the next 3-4 months
As part of its long-term funding plan, SKYCITY continues to explore property-related funding options, including a potential sale of the Federal St car park and seeking external investors to fund and ultimately own the Hobson St hotel development
. JLL appointed to secure external investors for the Hobson St hotel
For personal use only use personal For . Information Memorandum due to be released in November
9 Consents and Approvals
Resource Consent
Auckland Council recently approved the resource consent for the NZICC and Hobson St hotel
Approved resource consent reflects the preliminary design for the NZICC agreed with the NZ Government in May 2015
No further resource consent approvals are required to develop the NZICC and Hobson St hotel NZ Government Approvals
NZ Government has confirmed that the developed design for the NZICC remains “materially consistent” with the previously agreed preliminary design
Minor outstanding matters under the NZICC Agreement will be addressed with the NZ Government during November
No other approvals are required from the NZ Government to develop the NZICC
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10 Activation of Gaming Concessions
Gaming concessions under the NZICC Agreement will become effective upon the signing the NZICC building works contract . 230 new EGMs, 240 new ATGs and 40 new tables . TITO and cashless available on all gaming product . $50 and $100 note acceptors available on 359 gaming machines in premium rooms . Expansion of the permittable gaming area to include the Federal St footprint (including the Grand Hotel and existing Convention Centre) . Extension of gaming venue licence to 2048 (from 2021) . Gaming tax rate certainty for a minimum of 7 years $54m of additional capital expenditure allowed for activation of gaming concessions . Partial infill of atrium to accommodate new gaming product . Purchase of new gaming product . Implementation of TITO, cashless and note acceptor systems . New VIP gaming salons in the Grand Hotel
For personal use only use personal For . Replacement of back-up generators for the NZICC and Auckland main site
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Activation of Gaming Concessions
SKYCITY expects to activate the gaming concessions under the NZICC Agreement over the next month
Stage 1: By December 2015 Stage 2: By June 2016
TITO, cashless and note acceptors effective New ‘Horizon’ suites and salons on level 7 immediately of the Grand Hotel
60% of new gaming product to be allocated Conversion of ‘Jade Dragon’ to to the existing gaming floor accommodate additional ATG product Infill of part of the main atrium to expand the gaming floor podium
Gaming product activation plan (as at October 2015) Current Stage 1 Sub-Total Stage 2 Total Gaming machines 1,608 269 1,877 0 1,877
ATGs 39* 0 39* 201 240 Tables 110 27 137 13 150 Ratio of machines 15.0:1 15.0:1 15.0:1
For personal use only use personal For & ATGs to tables
*Currently included within definition of gaming machines
12 Key Design Features of NZICC
32,000 sqm of floor space available to cater for conferences of around 3,000 delegates
Five times larger than the largest convention facilities in NZ (which SKYCITY currently operates)
Capable of hosting conferences of around 3,000 people and one-off events of around 4,000 people
Plenary theatre capacity of 2,850 – largest theatre in NZ
Capable of hosting two 1,200 delegate conventions contemporaneously
24 separate meeting rooms to support overall facility
Additional ~1,327 car parks beneath the NZICC facility and integrated with the existing SKYCITY Auckland property
Pedestrian laneway with exciting retail and food & beverage offerings
For personal use only use personal For Strong national identity designed to provide an authentic New Zealand experience and embody Kiwi hospitality
13 Key Design Features of Hobson St Hotel
~300 room, five-star hotel designed by Warren and Mahoney Architects and Moller Architects
Building and façade designed to give the hotel a strong architectural identity
Design envisages a lobby restaurant & bar, gymnasium and 24 hour valet car parking service
Hotel porte cochère and entry plaza to interface with the NZICC and laneway
Direct connection to the NZICC and SKYCITY Auckland main site by air bridges For personal use only use personal For
14 Project Master Plan, Looking East
SKYCITY Auckland
Hobson St hotel NZICC
For personal use only use personal For Laneway
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NZICC – At Night, From Nelson St For personal use only use personal For
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NZICC – Hobson St View (including laneway) For personal use only use personal For
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NZICC – Laneway View From Nelson St For personal use only use personal For
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NZICC – Cross-Section View For personal use only use personal For
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NZICC – Entry Level Interior For personal use only use personal For
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NZICC – Plenary Level Interior For personal use only use personal For
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Hobson St Hotel – Hobson St View For personal use only use personal For
22 Hobson St Hotel – Connectivity to NZICC and
SKYCITY Auckland For personal use only use personal For
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Hobson St Hotel – Lobby For personal use only use personal For
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Hobson St Hotel – Porte Cochère For personal use only use personal For
25 Disclaimer
All information included in this presentation is provided as at 27 October 2015
The presentation includes a number of forward-looking statements. Forward looking statements, by their nature, involve inherent risks and uncertainties. Many of those risks and uncertainties are matters which are beyond SKYCITY’s control and could cause actual results to differ from those predicted. Variations could either be materially positive or materially negative
This presentation has not taken into account any particular investors investment objectives or other circumstances. Investors are encouraged to make an independent assessment of SKYCITY
For more information in connection with this presentation, please contact
Ben Kay, Investor Relations & Corporate Development Manager Phone: + 64 9 363 6067 Email: [email protected]
For personal use only use personal For
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