Business

Deutsche Bank sells lossmaking Cosmopolitan casino for $1.7bn

The Cosmopolitan of Las Vegas entrance Image copyright Getty Images
Image caption Deutsche Bank has owned The Cosmopolitan of Las Vegas for six years

Deutsche Bank has sold the lossmaking Cosmopolitan of Las Vegas casino and resort to private equity giant Blackstone for $1.7bn (£1bn) in cash.

The Cosmopolitan, a two-tower complex located on the Las Vegas Strip, cost more than $4bn to build but has not made a profit since it opened in 2010.

Deutsche took over the property after its developer defaulted on a loan.

But Germany's largest bank said it moved to sell the development because it was not central to its business.

"The bank is committed to reducing its non-core legacy positions in a capital-efficient manner which benefits shareholders," Pius Sprenger, Deutsche's head of non-core operations said in a statement.

Image copyright Getty Images
Image caption Las Vegas was displaced as the world's biggest gambling centre by Macau

Blackstone beat at least two other bidders for the Cosmopolitan, which is 52-stories high with nearly 3,000 rooms and has a prime location on the Las Vegas Strip.

The Cosmopolitan has lost about $100m annually for the past four years, which was largely due to a wider slowdown in Las Vegas.

The US gambling capital has struggled to recover from the 2008 financial crisis, which saw a sharp drop in revenues for many of its casinos as people reined back on spending.

Nevada was also one of the hardest-hit states by the sub-prime mortgage crisis, with property prices plunging by more than 50%.

However, business has since picked up in Las Vegas, with visitor arrivals, hotel room rates and spending on the rise.

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