Malaysia fits well into KidZania’s expansion

The Malaysian market fits well into the expansion plan of KidZania, says its founder and president Xavier Lopez Ancona.

As long as there are at least 700,000 children in the city, we would deem it a worthy investment, he adds.

What’s more, Kuala Lumpur is an important international tourist destination that attracts more than 20 million foreigners every year.

KidZania Kuala Lumpur is scheduled to be open to the public in early 2012. The brand has been franchised to a joint venture between Khazanah Nasional Bhd and Boustead Holdings Bhd through their newly established Rakan Riang Sdn Bhd, in which the former holds an 80% stake and the latter holds 20%.

The RM50mil project to be located in Mutiara Damansara, Petaling Jaya, marked Khazanah’s second investment in theme parks for the country, after its earlier investment of RM750mil for the development of Legoland in Iskandar Malaysia. It also represented Khazanah’s increasing focus on leisure and tourism sector as it has identified significant development opportunities in the area. The KidZania theme park is expected to be a lucrative investment as it is the first-of-its-kind in the country.

With its strategic location in the high-density township of Mutiara Damansara, the theme park is set to draw in a huge crowd every year. The venture would generate two streams of income – one from the visiting patrons and the other from its marketing sponsors.

Taking the entrance fees of US$12 (RM42) per child for KidZania Jakarta as a guide, the venture could generate at least RM20mil from the ticket sales per year if the target of 500,000 visitors per year is achieved.

The ticketing revenue would be on top of other operating revenues, which would come from fees paid by its marketing partners who have set up their brands in the theme park as well as from food and beverage sales.

Hence, Khazanah is confident of recouping its investment in KidZania Kuala Lumpur in less than five years.

As for Boustead, the joint-venture agreement with Khazanah would not have any material effect on the company’s net assets, gearing and earnings for the financial year ending December 2009, according to its recent announcement to Bursa Malaysia.

ECM Libra in its recent report viewed the recent development as a boon to the Mutiara Damansara township developed by the Boustead group. Its analyst said the upcoming KidZania theme park would increase the property values around the township and draw more visitors to The Curve shopping mall.

The analyst thought KidZania was a clever concept as it provides real-life experience of adulthood for children and an opportunity for other corporations to market their brands. For instance, the KidZania theme park in Jakarta has sponsors the likes of AirAsia, Sony, Hewlett Packard and Sunsilk.

By The Star