In the last quarter of 2006, we have seen the
value of entitlements spike again reaching $410,000 for a batch of
three entitlements. This places a value of $205,000 per entitlement.
As trading of entitlements continue and more
entitlements are sold from the country to the city, we are now
starting to see demand seriously outstrip supply. Thus it is
expected that entitlements will likely retain their value in 2007.
This shortage of supply is now seeing some of the larger operators
re-visit the purchase of smaller freehold hotels which have gaming,
where the land and building could be used for an alternate use and
the gaming moved into the purchasers city hotel.
Rumors of the release of entitlements by the Government from the
forfeiture pool is wishful thinking particularly before the State
Election in the early part of 2007.
On this basis we will see no
change in the value of entitlements in the first quarter of 2007.
Bligh Williams
