British-backed Merlin selling down regional Aussie assets

Two much loved family holiday destinations are on the block, with the Otway Fly in Victoria and Illawarra Fly in NSW now on the sales block.

Illawarra Fly Treetop Adventures. Picture: Supplied

British-backed Merlin Entertainments has listed two of its smaller Australian assets in regional Victoria and NSW, as it moves to focus on its larger holdings such as Legoland Discovery Centre and Madame Tussauds, as well as the acquisition of more hospitality assets on the eastern seaboard.

Merlin Entertainments divisional director Australia & New Zealand Ian Wood says the listing of the Otway Fly in Victoria and Illawarra Fly in NSW – both profitable businesses – was designed to focus more on the Merlin businesses that are providing larger returns for the hospitality giant which hosts more than 62 million guests annually to its global estate in more than 20 countries.

Merlin Entertainments is expecting $3m to $3.3m for the Illawarra Fly south of Sydney and $2.8m to $3m for the Otway Fly in Victoria’s Otway Ranges, which was particularly popular with mainland Chinese visitors prior to the Covid pandemic.

Both businesses, replete with treetop walks and zip lines, are being sold vacant possession via an expression of interest campaign closing December 5 through John Castran of Melbourne agents Castran. The buyer can purchase them together or separately.

Mr Wood said that together both businesses, acquired in 2013 by Merlin, attract around 100,000 visitors annually but obviously had brought in more visitors prior to Covid-19.

“Merlin’s strategy is to be focused on our mega gateway cities, which in Australia is Sydney and Melbourne,” Mr Wood said.

In Sydney, Merlin operates Sea Life, Madame Tussauds, Wildlife Sydney Zoo and the Sydney Tower Observatory. In Melbourne, Merlin has just two enterprises, Sea Life and the Legoland Discovery Centre.

“We are looking at developing those sites and also at new acquisitions. That’s where our future growth will come from,” Mr Wood said

He said the Otway and Illawarra businesses had zip lines that could be extended, while high ropes courses could be added. “There’s plenty of land here you could continue to extend and develop,” he said.

“We have not fully recovered to where we were with mainland China, we have not seen that return yet, we are hoping those guests will come back. We are seeing Indian, Korean, British tourists slowly increase, but not the numbers from China we had. And I don’t think we are going to see the China visitations in busloads that we had.”