In a groundbreaking move demonstrating its desire to expand internationally, VICI Properties Inc., an experiential real estate investment trust (REIT), has entered into definitive agreements to acquire four properties in Alberta from Century Casinos. The $164 million acquisition, announced on May 17, 2023, includes Hotel Edmonton, St. Albert, Century Mile Racetrack and Casino in Edmonton, and Century Downs Racetrack and Casino in Calgary.
Unlocking Real Estate Value for Century Casinos
The sale-leaseback deal allows Century Casinos to unlock the real estate value of its Canadian properties while continuing its operations in the country and providing greater financial flexibility for future growth.
Co-chief executives of the casino Erwin Haitzmann and Peter Hoetzinger, expressed their satisfaction with the deal, stating, “This transaction unlocks the real estate value of our Canadian properties while continuing our Canadian operations and provides us with greater financial flexibility as we continue to grow.”
The casino plans to use the sale proceeds to fund improvements at the Nugget Casino Resort in Nevada and for general corporate purposes. The executives also mentioned the potential to apply some proceeds to pay down debt under their credit agreement and/or to return funds to shareholders through stock repurchases and/or a special dividend.
Strengthening VICI Properties’ Portfolio
The acquisition bolsters VICI Properties’ real estate portfolio and marks its expansion into the Canadian market. John Payne, President and Chief Operating Officer of VICI Properties expressed his enthusiasm about the acquisition: “We are thrilled to announce our third international investment with the acquisition of Century’s four Canadian casino assets, demonstrating our ongoing desire to expand internationally and confidence in the Canadian gaming market.”
VICI Properties Inc. is an S&P 500® experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality, and entertainment destinations. The property acquisition augments its geographically diverse portfolio consisting of 49 gaming facilities across the United States and Canada.
Implications of the Deal
Simultaneous with the closing of the transaction, the Century Canadian Portfolio will be added to the existing triple-net master lease agreement between VICI Properties and Century, and annual rent will increase by CAD 17.3 million (US$12.8 million).
This move represents an implied acquisition capitalization rate of 7.8%. The tenants’ obligations under the lease will continue to be guaranteed by Century Casinos, Inc. The transaction, which is subject to customary regulatory approvals and closing conditions, is expected to close in the second half of 2023.
VICI Properties Recent Developments
VICI Properties Inc., an S&P 500® experiential real estate investment trust, is known for owning a vast portfolio of gaming, hospitality, and entertainment destinations. They have a foothold in some of the most iconic entertainment facilities on the Las Vegas Strip, including Caesars Palace Las Vegas, MGM Grand, and the Venetian Resort Las Vegas.
Their geographically diverse portfolio is spread across the United States and Canada, comprising approximately 124 million square feet. This portfolio features around 60,100 hotel rooms and over 450 restaurants, bars, nightclubs, and sportsbooks.
Recently, VICI Properties announced an increase in its quarterly dividend, indicating a positive financial development for the company. The Board of Directors approved an increase in the Company’s quarterly cash dividend for the second quarter of 2023 from $0.70 to $0.76. This financial update illustrates the company’s strong financial position and its commitment to delivering value to its shareholders.
Century Casinos Recent Developments
Century Casinos, Inc., a casino entertainment company, operates a total of 10 casinos across the US and Canada. Despite being a well-established operator in the gaming industry, the casino has been making efforts to further its reach and diversify its operations. Recently, the casino purchased the operating business of The Nugget Casino Resort in Nevada, with plans for upgrades at that location.