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The speculation ends - Shanghai Disney ready to roll
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Investment in this theme park project is almost equal to the budget of Shanghai World Expo 2010, and the park is expected to boost GDP by something in the neighborhood of a trillion yuan, while generating further multimillions through indirect associated activity. The theme park is the Shanghai Disneyland Project, which has been creating a stir in the capital market for the last three years. In January 2009, 48 hours of furious media speculation finally ended with the curtains opening on the mystery.

Hong Kong Disneyland Resort
Hong Kong Disneyland Resort [File photo]

On January 8, 2009, Shanghai Securities News published a story titled "Shanghai Disneyland project settled, to be opened in 2013", a report that was immediately denied by Disney's US headquarters. But the next day, China's domestic media reported that representatives of the two countries had signed an agreement in Shanghai Dongjiao State Guest Hotel. On the evening of the same day, news eventually broke that the Disney had confirmed its plan to work with the Shanghai municipal government to build a park, and both sides are submitting an application for central government's review and approval.

An informed source told the Shanghai Securities News that the city's government is fully prepared to host a Disneyland site and the project is sure to be approved.

"Discussions have been ongoing about the feasibility of a theme park project in China", reports Los Angeles Times, quoting Leslie Goodman, a spokeswoman for Walt Disney Parks and Resorts. "We worked on a joint application report with the Shanghai government which will be submitted to the central government for review."

Ms Goodman portrayed the development as "a milestone in a lengthy review process", but she refused to release more detailed information including the exact date of the report submission and how long the review process will take.

The joint project proposal outlines the legal and financial framework for the theme park to be built in Shanghai, in which Disney will take a 43 percent equity stake in Shanghai Disneyland, while a joint-venture holding company owned by Shanghai local government owns the majority 57 percent.

According to available information, the budget for the first Disneyland on the Chinese mainland is estimated to hit 24.5 billion yuan (US$3.6 billion). The initial phase will cover approximately 1.5 square kilometers. Shanghai Securities News learnt that the park's ground space will ultimately extend to 6-8 square kilometers when the whole project is completed, several times the size of Hong Kong Disneyland, and it is to open as early as 2014.

The statement does not specify the location of the project, but prior reports indicate that Shanghai Disneyland has picked the Huanglou area, at the border of Dongchuansha Town and Nanhui District. "The exact location may still change before receiving approval from central government, but it will be adjacent to the Pudong International Airport (PVG)," an insider says.

An informed source indicates that the Shanghai Disneyland will be classified as mega theme park by the standards of other Disneylands. In terms of the business model, its four major fields are theme and amusement park, film industry, media network platform, and associated consumer products. It is therefore likely to boost a series of industries in the A-Shares of the capital market, including real estate, entertainment, publishing, media network, toy manufacturing, and franchising.

Since last year, the city's real estate and finance industries have been affected by the economic downturn and the city's fast economic growth is being put to test. The 2010 Shanghai World Expo and the launch of Shanghai Disneyland will therefore attract plenty of attention.

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