Dubai World and MGM Mirage have reportedly sold part of a joint retail project in Las Vegas for $1.1bn.
The deal with mall operator Simon Property Group and investment firm Invesco Real Estate for CityCenter’s The Shops at Crystals, a 324,000 square feet luxury shopping centre, is expected to close in the second quarter, The National reported.
The Shops at Crystals is part of a mega $8.5bn CityCenter project built at the height of the property boom. The 27-hectare property with residential, hotel and entertainment, opened on the Las Vegas Strip in 2009, following an agreement between Dubai World’s Infinity World Development Corp and MGM in 2007.
At the time, the venture was valued at $5.4bn, with Dubai World contributing about $2.96bn for 50 per cent of the equity, according to a statement from MGM.
The project has suffered funding setbacks amid the financial crisis and led MGM to hire bankruptcy advisors, according to the Wall Street Journal.
In March 2009, Dubai World, one of the worst hit developers during the global crisis, filed a lawsuit against MGM as an order of protection after the US gaming hotelier admitted in a securities exchange commission filing that it had “substantial doubt" about its ability to continue with the project.
Dubai World claimed it was paying significantly more while getting less. But a few months later the company entered its own financial difficulties and requested a “standstill" on debt payments.
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However, the joint venture partners managed to turn around the project and last year they each received a $200 million dividend.
MGM Resorts International chairman Jim Murren said in a statement announcing the proposed sale that Invesco Real Estate and Simon Property Group were “the ideal stewards to maintain the high quality of the asset and usher in a new era of success".
Invesco Real Estate is a subsidiary of Invesco Group, a global investment firm managing assets worth $737.5bn at the end of February.
Simon Property Group owns partly or in total 231 retail real estate properties in North America, Europe and Asia.
Chairman and chief executive David Simon said the acquisition would allow the group to gain more leverage in the Las Vegas market.