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Khazanah in 2nd theme park investment

24 June 09 | The Business Times
by Pauline Ng
In Kuala Lumpur

MALAYSIA'S state investment agency, Khazanah Nasional Bhd yesterday signed an agreement to open a theme park in the Klang Valley in 2012, its second after Legoland in Iskandar, Johor.

The RM50 million KidZania theme park, an indoor educational theme park which lets children have a hands-on experience of adult occupations, would be owned by a joint venture company Rakan Riang, which is 80 per cent held by Khazanah's wholly- owned subsidiary Themed Attractions and Resorts, and 20 per cent by Boustead Curve, wholly owned by government-linked Boustead Holdings.

KidZania is a 'strategic investment' that fits well with the state investment agency's planned focus on tourism and education, its managing director Azman Mokhtar said at the licensing agreement ceremony with KidZania SA de CV yesterday.

Controlled by the armed forces fund, the Malaysian stock exchange listed Boustead group is to build the RM80 million 7-storey building in which the theme park would be housed on two floors occupying some 60,000 sq feet.

Located in the middle-class Mutiara Damansara suburb, KidZania Kuala Lumpur is expected to attract half a million visitors yearly, and based on the one in Jakarta is expected to charge an entry price of US$12-13 for kids and US$9-10 for adults.

KidZania is the brainchild of Mexican entrepreneur Xavier López Ancona. Mr Ancona said the average investment payback for a theme park was 7-9 years but 4-5 years for a KidZania. Since opening his first KidZania in 1999 in the Santa Fe Shopping Mall in Mexico City - it still claims an annual average attendance of 800,000 visitors - the Mexican entrepreneur has launched another five KidZania parks around the world.

The Kuala Lumpur park is KidZania's second in South-east Asia; there are plans for another five, including one in Bangkok.

The entertainment park targets children aged 2-12 years and aims to expose them to the adult world where they learn social interaction and the value of work and money.

In the five hours that they spend there, they can participate in over 90 role-playing activities at some 40 establishments and earn income, which they can spend at the park.

'Kids learn that money doesn't come from ATMs. If you want it you have to earn it,' Mr Ancona said of the concept.

Mr Azman was confident KidZania KL would do well given that many urban Malaysians spend most of their leisure time in malls. According to Wikipedia, a third of Malaysia's 27.7 million population is under 15.

On expected returns, he said: 'The payback is certainly better than a lot of other types of investments ... and it is also helping with the economic stimulus.' Upon completion, the park is expected to provide 400 'good jobs.'

Mr Azman was similarly upbeat about the 145-acre Legoland and its prospects, noting it would also be completed in 2012. To be built at a cost of RM750 million at the Medini precinct in Iskandar, Legoland is expected to face stiff competition from Singapore's two integrated resorts, including Universal Studios theme park.

Even so, Khazanah is counting on other operators' participation to enhance the appeal of its 2,200-acre eco-based theme park.