Russia Enters the New Age of Amusement
Although the idea of amusement parks appeared in Russia in the beginning of the 1990s, only now are the first projects being realized. According to specialists, this format of real estate has excellent potential, with investment guaranteed to be returned within a short period of time.
A New Format
With the appearance of entertainment zones in several retail centers and the creation of major entertainment centers, the growth of interest in the entertainment segment of the real estate market is undeniable. According to Olga Yasko, director of the analysis department at Colliers International, “This growth, on the one hand, can be attributed to developers’ confidence that Muscovites’ demand for entertainment and leisure will continue to grow. On the other hand, one can argue that the growing competition in other segments of the commercial real estate markets is forcing many developers to seek new investment ideas and development formats.”
The large array of examples and prototypes of amusement parks in the West, the most famous of which is Disneyland, further incites Russian developers to turn to this new format. Other examples of classic amusement parks include Port Aventura near Barcelona and EuroDisney in France. The Blackpool Pleasure Beach Park in Great Britain attracted almost six million people last year alone.
Yet still, in Moscow and the Moscow region, there are no modern amusement parks. Specialists usually ironically grin when places such as Gorky Park and Izmailovo are labeled amusement parks. However, the Moscow city authorities are planning to reconstruct Gorky Park in order to repair the park’s attractions, improve landscaping, and reconstruct the historical plan of the park to include a modern bicycle path, a dance square, as well as a 200room hotel and a music hall. In addition, the park will have a third entrance from Gagarin Square. Experts believe that the reconstruction of the park, which is visited by 3 million people annually, will attract businesses specializing in leisure and entertainment.
Several modern complexes have recently appeared that are designed for leisure and amusement but are too specialized to be considered amusement parks. For example, Volen and Sorochany are sports resorts, while Le Meridian Moscow Country Club is a hotel complex with sports facilities and a unique highgrade field for golf. Other projects in the Moscow area include spa resorts that offer a variety of amusement services, such as the Arthurs Spa Hotel. “Entertainment parks are differentiated from such entertainment centers by the size and scale of the project,” argues Mikhail Getz, vice president of development strategy at the company Blackwood.
The selection of attraction is also an important factor, as there exists a principle of synergy in which several types of entertainment attractions designed for a diverse audience are incorporated into one project and together create its success. “In multifunctional entertainment zones, it is very important to select a good combination of attractions so that they do not compete with each other but rather create a balanced mix,” states Natalya Chukaeva, director of the marketing analysis department at the Mashtab management company. “Specialized entertainment projects have a narrow target audience, and in order for them to maintain a clientele, they need to have a very professional or elite format, such as golf clubs. If a project is designed for a mass audience, then it should present a variety of entertainment formats, appropriate for people with a variety of ages and backgrounds.”
A variety of entertainment features can be combined in one area of an amusement park, including an aquarium, indoor ski slopes, a golf course, a safari park, an ice rink, a movie theater and racecar track. The imagination of the developer is only limited by the size of the park and financial resources. As for the cost of the project, there are many components of entertainment complexes, such as aquariums, that demand complicated technical support and maintenance. “Especially in light of the Russian climate, such features can considerably increase the price of project,” adds Natalya Chukaeva.
The size of an amusement park greatly differs according to the theme. Yuliya Nikulicheva, chief director of the research department at Jones Lang LaSalle, considers the optimal area to be 100400 hectares, where it is possible to spend 23 days. The area of an open park, according to Roman Ryzhkov, Head of the Department of the out of town property at the company Your Financial Trustee, ought to allow for a minimum of 10 sqm for every visitor. Therefore, if the developer plans to host up to 10 thousand people daily, then the open part of the park ought to cover no less than 10 hectares.
According to Mikhail Gets, entertainment parks for family leisure are optimal for minimizing risks. Children and their parents are attracted to parks that focus on known and favorite characters from animated films (such as at the Disney parks) or the popular toy Lego (LegoLand park). “In the West, there are also special marketing programs for children during their school vacations, such as discount entrance packages for parks on work days,” adds Ms. Nikulicheva.
The experts of CRE unanimously predict the financial success of such entertainment park projects. “Following the success of such projects as Volen, Sorochany and others, similar complexes are undoubtedly in demand,” states Mikhail Gets. “With an improved wellbeing and financial status, the population is spending more money on entertainment. As such, highquality, diverse and unique entertainment projects will achieve great success.” Natalya Chukaeva also believes that the economic potency of similar projects is high enough to justify spending large amounts of money to resolve costly technical problems. For example, the Dubaya retail center features a ski slope. “This expensive addition was included solely for the purpose of capitalizing on the land around the whole project. The slope’s ability to return on the investment is not even questioned.”
However, “Since entertainment parks have not yet become largescale, the exclusiveness of their services becomes their main sellingpoint,” believes Andrey Bushin. “Uniqueness becomes a very important factor for attracting visitors, as the increasing amount of offers for similar parks sharply increases the risks of losing out to more innovative offers. As such, the risk in the segment can be very high if a project is not done in an effective and innovative format.”
Safari Park
Over 750 hectares in the Dmitrovsky neighborhood have been acquired for the development of a safari park. The developers of the project is the company Safari ParkPodosinki, which was specially created for the project. The idea was developed more than 5 years ago by the general director of the company, Ivan Charyshkin. The first component of the concept is an amusement park divided into two parts: a hoteltourist complex and a theme park. The third component the safari park (the Wild Nature Park) is the sellingpoint, which will drive the success of the whole complex. There are similar projects abroad: “In the West, safari parks have been successfully combined with theme parks,” says Evgeniy Kvasov, official representative of the company Safari ParkPodosinki.
One issue that has been raised by this project is the lack of theme park specialists in Russia, including consultants, architects and management teams. For the Safari Park project, the Russian company ClassicPark, under the direction of Andrey Karpov, a professor at the International Academy of Information, developed the general plan and conception of the project. Otherwise, the realization of the park is being run by leading Western specialists. Likewise, the Wild Nature Park project was developed by German specialists under the direction of Mikhael Beer, a professor of veterinarian sciences who has extensive work experience with a safari park in Hanover. Evgeniy Kvasov notes, “In Europe, there are several safari park specialists who begin work at the development stage and stay on to oversee the park’s successful functioning.” As such, he considers the Wild Life Park project to be in safe hands.
The area of the Wild Life park totals 450 hectares and will include six thematic wildlife zones: Europe, Asia, Africa, South America, Australia and primates. In the beginning, there will be 1,101 animals, but this number should increase to 2,824. The basic idea of the park is to create the maximum feeling of being close to natural wildlife. For this reason, all enclosures and security systems will be hidden. Visitors will also be able to choose how they get around the park: car, bus, jeep or by foot.
Parkland
With an area of 5 thousand hectares in the Ramensky neighborhood, Parkland promises to be the largestscale project of the company Belaya Dacha. Initially, it seemed that the most important part of the project was going to be the casino and gaming zone, as the South African gaming company Sun International was signed on as the partner of Belaya Dacha. However, “in December 2006, new changes were made in the Russian legal code concerning the gaming business. In connection with them, the company Sun International suspended investment in this project since it is necessary that all entertainment centers and resorts run by the company include casinos,” recounts Viktor Semenov, representative of the board of directors of Belaya Dacha. “However, at the current time, Belaya Dacha is continuing to work on the Parkland project. As such, a new variation of an entertainment park without a casino is being worked on; though, the original idea to create an ecologically clean city park is not being changed. We want that the 5 thousand hectares of land in the Ramensky neighborhood and the forest surrounding the area, which belong to Belaya Dacha, become a model of how man can live in the 21st century.”
The estimated time needed to realize the project is around 8 – 10 years. The amusement park of Parkland will be calculated based on the residents of Moscow and Moscow region, as well as guests from other regions of Russia and CIS countries. Outoftown guests will find it especially convenient that the park is located 12 kilometers from the Domodedovo International Airport.
MEGA project
In November 2007, a retailentertainment complex – MEGA Belaya Dacha (phase 2) – is scheduled to open. With up to 60 million visitors expected annually, it stands to become one of the most major of its type in Europe. In addition to its size, the complex will differ from other such complexes due to its wide range of features, including: 12 movie theaters, a bowling alley, a hockey rink, etc. The most unique feature of the project – its sellingpoint – is the 250meter transparent bridge that connects the two parts of the complex and features retail galleries. The Swedish company IKEA will manage the complex, and the estimated period for return on investment is 8 years.
Rouza a la Suisse
In a view of recent events concerning scandals around of company Your Financial Trustee, in which Vasily Bojko was arrested, the prospects of realizing the program Rouza a la Suisse look foggy. But, as the heads of the company have assured, the approved plans will be built.
The entertainment park at Rouza a la Suisse is comprised of several parts and is spread over a large territory of around 40 thousand hectares, with a safari park taking up around 200 hectares. The area will also feature the Panovo ski park with 26 trails, as well as a horse park and yatch club. “We specially designed the project so that it could be used year round, ruling out such factors as seasons,” states Roman Ryzhkov. “This is very important because it will allow us to maintain the occupancy rate at our hotels at a minimum of 70% throughout the year (in total, there are 240 hotel rooms in 2 hotels, as well as 250 cottages for rent).
In Mr. Ryshkov’s opinion, the project will certainly have a demand. “Around 12 14 million people live in the Moscow area, including 4 million families. Our marketing research indicates that a minimum of 300 thousand families are ready to come to such parks. The demand is there, but the offer has yet to come.”
Your Financial Trustee designed practically the whole project in its own style, as the company has its own architectural bureau, analyst department, etc. Mr. Ryshkov further adds, “The basic strategy of the project was to do it in our own style. Certainly, however, experts were brought in to help with a lot of the work, such as zoologists for the safari park.” The company plans to oversee the management of the whole project.