Aussies chase Rainbow's End pot of gold

The Power Surge attraction at Rainbow's End. Photo / Glenn Jeffrey

Queensland theme park operators are being tipped as possible bidders for Auckland's Rainbow's End.

Stephen Hamilton, a director of hotel, tourism and leisure consultants Horwath HTL in Auckland, said Gold Coast park operators could be the most likely buyers of the Manukau business.

"These Australian businesses would have the specialised knowledge, expertise and existing executive management team relevant to operating Rainbow's End," said Hamilton, naming Dreamworld, Sea World, WhiteWater World and Warner Bros Movie World as the dominant businesses.

"These parks have a degree of critical mass and reputation as a major destination operators.

"Rainbow's End is well-located in New Zealand, being in Auckland, near a motorway and central interchange."

Its success depended on any owner continuing to invest in new rides and assets to appeal to the mainly domestic customer base, Hamilton said.

That was in contrast to the Gold Coast parks where overseas visitors, including New Zealanders, were a far more dominant client base.

Dean Humphries, national director of Jones Lang LaSalle Hotels in Auckland, said Rainbow's End as an asset was extremely specialised. He also thought Gold Coast bidders were likely.

Almost three-quarters of New Zealand Experience, which operates the theme park in Manukau, is being put up for sale in a deal announced this week.

The estate of George Ryerson Gardiner, which holds 27.7 million shares, told NZ Experience it wants a process begun to seek expressions of interest for these shares.

Canada's Garlow Management, trustee for the estate, said it wanted out.

Humphries said the Rainbow's End sale might be more of a property than a tourism play. QV showed the big site at 2 Clist Crescent was worth $50.2 million: $4.2 million in improvements and $46 million in land.

Humphries said Jones Lang was familiar with rare assets such as theme parks because it valued the major Gold Coast parks.

Dave Lock, a director of New Zealand Experience, said his company viewed Rainbow's End as a tourism and entertainment business, not a real estate asset and he believed buyers would agree.

New Zealand Experience had a market capitalisation yesterday of $11.8 million and he did not yet know how the sale process would be handled, whether corporate advisers or consultants would be used, or even whether Rainbow's End would be marketed internationally.

The park had 256,500 visitors in the year to June last year, Lock said, but that was before a new ride was introduced and fewer than the usual 290,000 to 300,000 annual range.

Last year the business spent $2.5 million on its first new ride in five years, the Invader, in a bid to breathe new life into the park after visitor numbers were hit hard by the recession.

Manukau City Council owns the site off the Southern Motorway. On March 8, NZ Experience told NZX that its subsidiary, Rainbow's End Theme Park Ltd, confirmed an agreement to renew its lease property.

"The agreement to lease relates to the lease of the land on which Rainbow's End Theme Park operates in Manukau City, and extends the lease tenure through to June 30, 2034," the business said.

It had to give up 0.4ha of land in return for the lease renewal.

Rainbow's End

* NZ's largest theme park, at Manukau.

* Home of NZ's only corkscrew rollercoaster.

* New $2.5 million Invader ride.

* Power Surge can spin people vertically and horizontally, 18m high.

* Fear Fall drops 18 storeys at 82km/h.

* Has interactive 3D virtual theatre.