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Dubai: Dubai Parks & Resorts is to raise its share capital to take on its second mega project — the ambitious Six Flags Resort in Jebel Ali. This was one of the topics in the Board of Directors’ agenda held last Thursday (March 24), and which has been approved subject to regulatory go-ahead. Further details of the proposed project costs and how much of it will be via equity has not been disclosed.
Six Flags operates 18 locations in North America and with revenues of $1.3 billion. Its international reach has got a boost with the launch of its Vietnam presence.
It was in April 2014 that the master-developer Meraas confirmed plans to develop a Six Flags destination in Dubai. The latter operates multiple resort and themed park destinations in the US, its home market. At the time it was Meraas’ leisure and entertainment division that entered into the agreement with Six Flags. The mandate is now with its DFM-listed subsidiary, Dubai Parks & Resorts.
It will be interesting to see the extent of the debt portion Dubai Parks will raise for Six Flags. According to a real estate analyst, “themed park destination projects usually have a sizeable gearing (debt component) and that’s the nature of the industry. In that regard, Dubai Parks can significantly raise its gearing if it wants”.
Dubai Parks most definitely has the track record of running a tight ship. Right from the beginning it was fixed on an October 2016 opening, and which it has reiterated through subsequent announcements. Much of the infrastructure at the destination — essentially three theme parks and other multiple retail and entertainment attraction — is ready. The same holds true for its individual attractions such as the rides and other intellectual properties.
As of end 2015, Dubai Parks had used up nearly Dh6 billion on the development build-up.
The Six Flags development, while being an attraction in itself, could also help the Dubai Parks destination in its own way. Any hospitality component created at Six Flags could, conceivably, help with the visitor needs at Dubai Parks. Given its location further down Shaikh Zayed Road in Jebel Ali, the location will require a major investment in new hotel projects to meet future requirements.
Within Dubai Parks, the developer is building a 500-room Lapita Hotel. The destination as a whole has set sights on attracting a whopping 6.7 million visits in the first 12 months of operations and generating Dh2.4 billion.