Sim Leisure Group has issued a statement on the reports of Singapore Kidzania being purchased by the group from Khazanah, which Prime Minister Datuk Seri Anwar Ibrahim said should be investigated.
The company said KidZania Singapore was a failed asset that was closed and went into receivership under a Singapore liquidator and that it took up a bid from the liquidator for the non-movable assets. As this was during the height of the COVID-19 pandemic (and has been negotiating the lease for the facility for the last two years with Sentosa Development Corporation).
In submitting its original bid, the company said it took significant risks associated with the bid due to several unknown reasons including not being able to physically check the non-movable asset because it was in a lockdown and we were not able to travel (the border only reopened on 1 April 2022), the condition of the KidZania Singapore asset and the cost of renovating was unknown at the time.
It also needed to secure the lease from the building owner, Sentosa Development Corporation. Without the lease, the asset would be redundant as the asset is a NON-MOVABLE asset it cannot be moved to another building and therefore has only one use. Besides Sim Leisure still needed to secure the license agreement from the licensor KidZania Mexico, during which Khazanah was never involved in the process.
The Founder and Executive Chairman of Sim Leisure Group, Dato’ Sim Choo Kheng said that “In taking over failed assets like KidZania Singapore where we have been criticized for the purchase price. The general public does not understand that a failed theme park can end up as scrap metal most of the time, such as MAPs in Ipoh.
Unlike other failed assets such as hotels, resorts etc. which can be repurposed into residential apartments or other
commercial use, failed theme park projects have very limited use.” According to Dato’ Sim, “There are many challenges facing the theme park industry in emerging markets. Theme Parks are high risk, because it is a highly specialized businesses, which explains why so many projects fail.
The founder further commented, “Investors should think carefully before investing in theme parks. It’s not all about buying equipment or engaging IP owners or foreign expertise. Ironically these are actually the main reason they fail. “Unfortunately, there are more failures on the way, it is inevitable”.
