Macquarie Leisure Trust Group (ASX:MLE) today announced an independent revaluation of the Dreamworld theme park had delivered a $51 million uplift to $226 million as at 30 June 2006 compared to $175 million as at 31 December 2005.
The Group’s chief executive officer, Greg Shaw, advised the 29 per cent gain primarily reflected a material change in valuation assumptions. The discounted cash flow has incorporated a lower discount rate of 14 per cent, which is in line with recent market sales activity for major Australian tourism and leisure assets. Mr Shaw said the uplift also reflected the Group’s ability to improve operational performance of the asset.
“The valuation reflects the consistent revenue and profit growth of Dreamworld to date, the park’s prominent location and the favourable zoning that underwrites future prospects for ongoing development and profit growth,” he said.
Mr Shaw highlighted the favourable market environment for the Dreamworld business was also taken into account in assessing the asset’s value. “Dreamworld derives approximately 80 per cent of its customers from the domestic market, which has been supported by steady population growth in South East Queensland, major tourism accommodation developments on the Gold Coast and the ongoing availability of discounted airfares to the region,” he said.
Moreover, Dreamworld’s ability to capture this demand by establishing affiliations with other leading brands has created a range of unique attractions that appeal to all ages Macquarie Leisure Trust Group 2 and demographic markets. Standout attractions such as Wiggles World and Nick Central combined with Australia’s largest collection of major thrill rides helped to secure the impressive increase.
The valuation was completed by Jones Lang LaSalle Hotels and will be incorporated into the 30 June 2006 accounts. The valuation excludes the excess development land to the north of the Dreamworld site that forms part of the future Coomera Town Centre and excludes any construction costs associated with the recently approved water park that is being developed adjacent to Dreamworld.
Mr Shaw also advised construction of the water park was progressing well with major ride structures being erected over the coming month. “The water park will provide a new level of customer experience with an inventory of new rides and attractions never before seen in the Australian market,” he said.
The water park will be operated as a separately gated attraction, allowing the Group to promote both parks through two and three day passes designed to suit local, interstate and international markets. The water park is on track to open for business before Christmas 2006 and in time for the peak January trading period.