HotelsLindsay SaundersMon 09 Nov 26
Dreamworld Banks on 250-Key Hotel, Precinct for 20pc Returns
Dreamworld owner Coast Entertainment has added substance to a framework approved by the state for its proposed $260-million hotel and entertainment precinct at Coomera on the Gold Coast.
The company’s annual general meeting address on November 3 disclosed the financial modelling behind its plans to build a four-star hotel and an entertainment, dining and retail precinct beside its Gold Coast theme park.
It revealed a 250-room Dreamworld-branded hotel with an indicative investment of $200 million, including land, and a further $60 million for the leisure precinct, as central to its plans to future-proof the asset.
The hotel will be at the north of the site near to the entrance boulevard with entertaining, dining and retail tenancies, and leading to the existing entrance of the theme park
The new precinct has been forecast to deliver leveraged investment returns above 20 per cent.
Coast chief executive Greg Yong said an independent strategic review by Barrenjoey had assessed options including selling land, partnering with third parties and undertaking development itself.
The review identified company-led development of the hotel and leisure precinct as the preferred pathway, with preliminary modelling indicating leveraged internal rates of return above 20 per cent and a combined value on completion of about $330 million.
The figures are indicative assessments, not earnings forecasts or committed outcomes, and remain subject to construction costs, demand, operating performance, financing and further feasibility work.
Coast, formerly Ardent Leisure, said it was progressing masterplanning, technical design and independent cost validation before further development applications, engineering, tendering and financing arrangements.
The hotel is provisionally targeted for completion around 2030–31, ahead of the 2032 Brisbane Olympic and Paralympic Games.
The entertainment, dining and retail precinct may be delivered in stages and open before the hotel.
The precinct would also be accessible to residents without requiring theme park admission, broadening its potential customer base beyond Dreamworld visitors.
Coast is considering funding the projects through surplus cash, corporate or project debt, capital partners and the eventual sale or monetisation of non-core land.
The company said its current strategy did not contemplate a new equity raising. Preliminary funding assessments indicate peak gearing could remain within its target range of 30 to 35 per cent, although no final financing package has been agreed.
Yong said the company would prioritise safety, maintenance and attraction renewal at its existing parks before committing development expenditure.
The proposal follows Queensland Government approval in July of a development framework covering Coast’s 55.3ha Coomera landholding, which includes Dreamworld, WhiteWater World and surrounding undeveloped land.
It allows for tourism, nature-based experiences, accommodation, entertainment, retail and high-density residential uses across four precincts.
Coast has said it did not intend to become a residential developer, instead viewing the additional land-use options as a means of realising value through capital-light arrangements when market conditions are appropriate.
