Real estate opportunities

It's no secret that real estate near high quality surfing waves commands significant premiums worldwide. Until now people and projects had to go find the waves. With our technology, the waves are brought to the people.

While we have conducted a myriad of detailed business planning exercises to explore some of the possibilities (as have some of our partners and licensees) it does not take a lot of sophistication to see how developers benefit from the ability to create good waves in a pool or lake.

Simplistically, assume that the entire value creation surrounding the development of a wave pool is to create a "center-piece" or entertainment attraction in a large-scale development project. This basic philosophy has been in existence and proven successful for decades. Shopping mall owners do it with movie-theatres and/or unique anchor tenants, and community and resort developers do it with golf courses. You invest to create an attraction that people will come to use, and financially benefit from the ancillary revenue generated by the development around it.

While a large-scale wave pool may cost more than a standard movie theatre, some high quality golf courses require upwards of US$50M to build and they require a significant amount of land and maintenance. Given the huge surge in the popularity of board sports over the last decade and a corresponding boom in lifestyle sports and youth culture, it's only a matter of time before smart investors capitalize on the opportunity to create the next generation of lifestyle developments.

This can work in a variety of applications, and the business model mimics that of the "tried and true" movie theatre or golf course development model. Wave pools could be the center piece of themed retail experiences, residential communities, large hotels and unique features at mixed-use resorts. The pool provides a significant competitive advantage to the development.

The philosophy is substantiated at Boscombe Beach in England where ASR Ltd is building a reef designed to create a beginner style surfing wave. The reef is the center piece of a US$20M regeneration project that includes residential flats, restaurants, retail space, and ancillary rental facilities. Since the project was approved, the local property prices have increased some 30% and outstripped appreciation in surrounding coastal communities.

If we assume that the pool or lake brings in revenue in its own right, then the business plan is even better.