Madam Tussauds owner Merlin Entertainments plans to open a Legoland resort in Shanghai to cash in on the rising family tourism market in China, according to a statement this week by the company, which is in the process of being taken private by a consortium led by Blackstone, CPPIB and Lego’s parent company, Kirkbi.
The resort in southwestern Shanghai’s Jinshan district, which the partners estimate will require investment of £500 million ($638 million), will feature colorful Lego brick elements with Chinese cultural characteristics, and is expected to be one of the largest Legoland resorts in the world Merlin said in the statement.
The British theme park operator, which purchased the Legoland parks from the Lego Group in 2005, is hoping to replicate the success of the $5.5 billion Shanghai Disney Resort, and comes after Merlin has opened a string of other entertainment destinations in China under its Madam Tussauds, Dungeons and Legoland brands.
Adding to Shanghai’s Attractions
“A gateway city with modern consumers, Shanghai is already the home for many Merlin brands, and it has been our ambition for some time to build a full-scale theme park that offers the people of Shanghai and visitors to the area the opportunity to immerse themselves in a unique Legoland experience,” said Nick Varney, chief executive of Merlin Entertainments.
The Shanghai Legoland project, which is not expected to open until after 2023, will target families with children aged between two and 12, and will also include a 250-room themed hotel, coupled with other neighboring facilities, according to Merlin. In 2017 the UK firm had announced plans for a Legoland near Dianshan lake in Shanghai’s Qingpu district, however, this new project is said to supersede that plan.
The British theme park operator, which purchased the Legoland parks from the Lego Group in 2005, has joined forces for the venture with the government of Shanghai’s Jinshan district, Chinese media and entertainment giant CMC and Kirkbi.
Aiming to Be the Disney of Jinshan
Merlin’s eleventh Legoland resort globally will be located about 75 kilometres south of People’s Square in central Shanghai, with the Jinshan party secretary Hu Wei Guo pointing to the project as an opportunity for the district, which borders Zhejiang province to accelerate its development and spur consumption.
“(The park) not only supports the economic bridge between Shanghai and Zhejiang province, and better contributes to the high-quality integrated development of the Yangtze River Delta region; it also promotes Shanghai as a theme park destination with Disney Resort in the east and Legoland Resort in the west, supporting the local tourism economy,” Hu said at an event unveiling the initiative at the China International Import Expo (CIIE) in Shanghai this past week.
Hu’s reference to Shanghai Disneyland’s performance demonstrates the goals of the new project, with the Mickey-themed attraction ranking as the world’s eighth-most-visited theme park last year, after drawing nearly 12 million visitors, according to independent industry analysts.
Fittting Together the Bricks of a China Retail Strategy
Lego began distributing products in mainland China more than 30 years ago and the new park fits into an expanding retail strategy which puts the privately held Danish firm on track to have 220 stores in more than 50 Chinese cities by the end of 2020.
The brand now has three flagship stores in China, including two in Beijing and a third in Shanghai, where the toy maker reports its fastest growing sales of any city globally. Lego opened a regional hub office in Shanghai in 2014 and set up a manufacturing facility in the city of Jiaxing, just south of Jinshan in Zhejiang province, in 2016.
Merlin Builds China Network
Merlin, which will be 50 percent owned by Kirkbi when the buyout is completed, has been expanding in China both through Legoland resorts and other attractions.
In September, the firm reached an agreement with Global Zhongjun Cultural Tourism Development to develop and operate Legoland Sichuan, in Chengdu’s Tianfu district, with that project expected to open in 2023.
In addition to the Sichuan and Shanghai Lego projects, Merlin currently operates 13 attractions in China including Legoland Discovery Centres, Madame Tussauds, the Sea Life Centre, Dungeons, Peppa Pig World of Play, and Little BIG City. Included in this portfolio is Merlin’s Shanghai Dungeon, which opened in 2018 in Pradera Retail Asia’s Mosaic Shanghai project on the city’s bustling East Nanjing Road walking street.
Kirkbi, Blackstone and CPPIB reached an agreement with Merlin shareholders in July of this year to take the world’s second-largest operator of attractions (after Disney)private in a deal which values the company at $7.6 billion. The transaction is expected to be completed by the end of this year.