Macquarie Lesiure to invest $56 million in new world class water park

Listed property trust Macquarie Leisure Trust Group (ASX:MLE) is planning to develop a major water theme park on Queensland's Gold Coast that is expected to boost returns for investors and create hundreds of jobs for the local community.

Announcing the development today, Macquarie Leisure Trust Group Chairman Neil Balnaves said 'Dreamworld Water Park' would be a world class stand-alone water park forming part of the broader Dreamworld leisure precinct on Queensland's Gold Coast.

The water park will offer a range of new generation attractions never before seen in the Australian market, together with an expansive wave pool in a themed environment. It will also incorporate the latest environmentally friendly technology to ensure sustainable water management practices. It is estimated the filtration system will reduce annual water wastage from backwashing by 99 per cent when compared to traditional systems.

The development will be the first new Gold Coast theme park in 14 years, following the opening of Movie World in 1991. Over that time the Gold Coast has enjoyed outstanding tourism growth and substantial expansion of air transport capacity and tourism accommodation. In addition, South-East Queensland is now one of Australia's fastest growing population centres.

Macquarie Leisure Trust Group CEO Greg Shaw said the development was attractive for a number of reasons. "The water park development is an exceptional opportunity to enhance the Dreamworld business and deliver incremental profit to the Group while providing the Gold Coast with a unique tourism icon," he said.

Mr Shaw expected patronage would be in line with Dreamworld's target market and would be heavily weighted towards the local and interstate market, with international patrons making up less than 6 per cent of total attendance.

"The development reinforces the Group's focus on domestic leisure with little risk exposure to changes in international attendance," Mr Shaw said.

The Group will invest capital of $56 million on the project, which will be funded through debt, Securityholders' distribution re-investment plans and working capital.

International experience suggests water parks generally offer a superior return on investment compared to theme parks and require substantially less ongoing capital re-investment. Indeed, an internal rate of return in the range of 16 to 20 per cent is anticipated from the investment with trading in the first year expected to deliver earnings accretion.

MLE is a specialist investor in leisure and entertainment assets including the Dreamworld theme park, d'Albora Marinas and AMF Bowling Centres. The Dreamworld Water Park is a unique opportunity for the Macquarie Leisure Trust Group to use its expertise to capitalise on:

•strong demand for water-based leisure attractions at the Gold Coast
•the opportunity to maximise returns from existing land holdings
•cross-marketing opportunities and leverage from the existing Dreamworld customer base, marketing spend and profile
•the ability to use existing operational management, back office and marketing resources of Dreamworld
•the potential to expand the market through the introduction of new packaging options and a "two park pass"
•the ability to use the experience gained from the management of the AdventureWorld water theme park in Perth

Dreamworld Water Park will also provide a new venue for Dreamworld's growing special events market. This market has grown substantially since the opening of the Gold Coast Convention Centre in 2004 with Dreamworld already generating more than $2 million annually in special events revenue.

Subject to receipt of final planning approvals, construction of the water park is expected to commence in January 2006 with completion scheduled for mid-December 2006 - just in time for the summer holiday season.

The development will also boost the local economy, creating more than 250 jobs during the construction phase and more than 120 ongoing jobs following the scheduled December 2006 opening.

MLE is a stapled group comprising a listed property trust, which invests in entertainment and leisure assets including Dreamworld Theme park, d'Albora Marinas and AMF Bowling Centres, and an operator that leases the properties from the Trust and operates the businesses. More than $28 billion in property assets are managed under the Macquarie brand across a portfolio of listed and unlisted property trusts, unlisted development funds and property investment syndicates, globally.

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