March 23, 2015 7:23 am
Citic and Village Roadshow ink $500m Asia theme park deal
Jamie Smyth in Sydney and Charles Clover in Beijing
SYDNEY, AUSTRALIA - DECEMBER 12: Patrons swim in the wave pool at the opening of Sydney theme park, Wet'n'Wild on December 12, 2013 in Sydney, Australia. The new water park, featuring 42 slides and attractions, replaces Wonderland which closed in 2004. (Photo by Brett Hemmings/Getty Images)©Getty
Village Roadshow, the company that operates Wet’n’Wild theme parks and Warner Bros Movie World in Australia, is teaming up with Chinese conglomerate Citic Group to create a US$500m fund management business to invest in Asian theme parks.
Village Roadshow said on Monday that both companies would spend $25m each over the next two to three years investing in theme parks, entertainment facilities and related real estate developments.
Potential developments have been identified in China, Malaysia and South Korea. The fund management company will be 51 per cent owned by Citic Trust — a subsidiary of Citic group — and 49 per cent owned by a subsidiary of Village Roadshow, it said.
Robert Kirby, Village Roadshow co-chief executive and co-chairman, said the deal placed the group “in a position to progress our expansion plans . . . aided by access to impressive development sites and the experience that Citic brings to the partnership”.
The deal appears to be driven partly by China’s love affair with the world film industry. While global film revenues inched up only 1 per cent between 2013 and 2014, China’s box office takings increased 34 per to $4.8bn over that period, according to the Motion Picture Association of America. In 2013 alone, the Chinese mainland added more movie screens than the total operated in France.
Selling western films, or the trappings thereof such as theme parks, has driven a spate of recent deals.
US film company Universal Studios in October outlined plans to build a $3.3bn theme park in Beijing. The park, covering 120 hectares in the district of Tongzhou, southeast of the capital, is expected to open in 2019.
Village Roadshow was founded in 1954 as the operator of one of Australia’s first drive-in cinemas in Melbourne, and has grown to become one of the country’s biggest cinema chains.
It is also a 47 per cent shareholder in the Los Angeles-based Village Roadshow Entertainment Group, a subsidiary of which backed the hugely popular Lego Movie .
Shares in Village Roadshow initially jumped by almost 5 per cent to A$5.72 on Monday following the joint venture announcement, but later fell back to close roughly unchanged at A$5.48.
Investments in theme and amusement parks across the Chinese mainland have grown over the past five years to meet greater consumer spending on leisure activities. Domestic industry revenues are expected to hit $2.9bn this year, up 9.6 per cent from last year, according to data from IbisWorld, the market research group.
Most of the recent China-US entertainment deals involved outbound flow from China, with investors seeking to buy properties, rights, or stakes abroad.
Last week, Huayi Brothers Media, China’s largest privately run film production company, said it had reached a deal to finance, co-produce, and release 18 feature films by 2017 with an unnamed US partner. News reports subsequently identified the US partner as Burbank-based STX Entertainment.
Reply With Quote