Macquarie Leisure commits capital expenditure for Dreamworld

Macquarie Leisure Trust Group are to invest around $6 million per year into Dreamworld. What does this mean for this Australian theme park giant?

To develop and remain a success, theme parks need to grow and constantly update and change. With break-neck competition in the theme park industry, fuelled by a desire to outdo the competition in all aspects, capital expenditure (capex) is crucial.

By Richard Wilson
19 September 2005

Fear not Dreamworld fans, as the Macquarie Leisure Trust Group have the goods. Revealed in the Trust's most recent financial year report, the owners will pour a total of $6 million into the park each year to bring us new toys for fun.

Before you get too excited and start plotting each year's exciting new attractions and how to spend this money, there's more to it. This doesn't mean the park will invest $6 million each and every year into new rides. It's far more likely that this money - or at least the bulk of it - will be withheld and channelled into bigger attractions.

Macquarie Leisure have owned Dreamworld since July 1998 and have been pouring in investment dollars to see the Trust's flagship property grow in value by around $50 million, having invested nearly $30 million into capex in this time. This averages out to a little over $4 million each year.

So this means that if they were to spend $4 million in one year, the next year they could spend $8 million, or the year after $14 million. Of course there would be additional expenses along the way, but this is the easiest way of thinking about it. For instance extenuating circumstances could arise where more or less than $6 million is allocated for capex and this figure will be adjusted with each new financial year.