Sim Leisure Group operates on a unique vertically-integrated business model where it designs, builds and operates its branded attractions and partners with landowners through a business model that is operationally profitable from day one.
Unlike many traditional theme park and attraction operators who insist on developing and owning capital intensive assets with very long payback periods, Sim Leisure Group does not buy land or owns the assets – instead it leases sites and has revenue-sharing agreements in place with the landowner, where the landowner funds the capex with a guaranteed return on capital.
This arrangement also adds value to idle land as the Group does not need prime land for its theme parks and can utilise forested and undulating terrain.
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The retail landscape has changed dramatically in recent years, accelerated by the growth of online shopping and the COVID-19 pandemic. Retail malls are now transforming into lifestyle centres attracting footfall through entertainment and F&B offerings.
Sim Leisure Group operates on a unique vertically integrated business model where it designs, builds and operates its branded indoor attractions and partners with mall owners/operators to fund the capex with a guaranteed return on capital.
Currently, Sim Leisure’s business model involves us working with landowners/developers positioning the ESCAPE Park as an integral part of their overall offering and fully funding the project capital investment. This business collaboration works best where it forms part of an integrated resort and/or residential development, where ESCAPE Park becomes a 'catalyst' and destination ‘crowd-puller’.
Sim Leisure designs, builds, and operates the ESCAPE park with a required capex ranging from RM20m - RM50m, land size between 20 - 100 acres and minimum lease period of 30 years, depending on the location and the size of the local population/tourists arrival.
In return for the landowner/developer funding the initial upfront (one-time) capex investment, Sim Leisure will guarantee to pay the landowner/developer:
In addition to the 10% contribution stated above, Sim Leisure will also reserve a minimum of 5% of the Gross Turnover (GTO) annually towards future capex over the life of the project.
The 5% GTO reinvestment is to ensure the park continues to expand and grow with ongoing new attractions.
In short, the landowner/developer funds a one-time capex investment with subsequent phases of the development self-funded by Sim Leisure through the 5% GTO.
Through this collaborative approach the landowner/developer can avoid the pitfalls of very heavy upfront capex investments for roller coaster theme parks (typically 10x more the capex than ESCAPE Parks) and investing in attractions which are not core to their business and most likely will fail, as has been shown with many such projects throughout Asia.
Sim Leisure’s collaboration method enables landowners/developers to tap into the growing trend of nature-based adventure self-directed play, which has been further accelerated by COVID-19 and is on-trend with the millennial generation and offers a guaranteed return on investment.
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