Slowdown In Real Estate Sector Hampering Screen Additions For Multiplexes

The slowdown in the real estate sector has reduced the pace of new-screen additions for multiplex chains this financial year, forcing them to look at alternatives. Multiplexes are now either expanding within existing properties or converting single screens into multiple screens through partnerships.

Multiplex chain Inox Leisure, for example, launched its biggest mall offering on Wednesday, an 11-screen theatre in Mumbai called the Megaplex. For this, Inox converted its existing seven-screen multiplex in a mall in the suburb of Malad into a 60,000 sq ft, 1,586-seater megaplex that can host 60 shows and an audience of 6,000 per day. The Megaplex, launched at an investment of Rs60 crore (offering six viewing formats) is considered strategic by the company, which it says makes movie-viewing more experiential and immersive.

Sidhharth Jain, director, Inox, said the average number of screens in a single property is four-five screens. “There are many such properties where we are expanding the footprint by taking more square feet at the same space. The (screen) addition is coming not only from new builds, but from existing builds as well,” he said

Slowdown in real estate sector hampering screen additions for multiplexes

Jain said growth in terms of screen additions this year would be lower. Inox has signed up for 900 new screens with mall owners, but is unsure of delivery. “We are averaging about a 100 screens a year. We can execute faster, but the malls are not coming up that fast,” he said.

Last year, Inox added 85 new screens, which it claims was a record. “This year I don’t think we will beat that number, we will be closer to the 70-screen-mark,” he said. From 600 screens, Inox aims to touch 1,000 in the next four years.

But the bigger opportunity is conversion from single to multiple screens, said experts. As such, single screens are shutting shop and multiple-screens are gaining ground (see chart).

“Permissions for converting single screens into multiple ones takes time. But the good part is that the real estate is available. Screen owners are also willing to convert from single screen to a multiplex, but they need to find a partner who is ready to invest,” Jain said.

Cinepolis, which operates around 380 screens, has also taken the route of conversion from single screen to multiple screens. Devang Sampat, deputy CEO, Cinepolis, said, “We converted a two-screen theatre in Hyderabad to a five-screen one recently and we are doing more such projects in the south,” he said. Cinepolis has signed up with mall owners for 500 new screens in the future.

PVR Pictures, which added 36 screens this year, has guided for 80 new screen additions in FY20. The company did not comment. ICICI Direct Research said, “This is the lower end of PVR’s earlier guidance of 80-100 screen additions. We note that the lowering of guidance is possibly due to an overall slowdown in real estate.”

As such PVR is venturing into tier II and III cities through a format called PVR Utsav, which offers a differentiated experience from the typical single screen theatres in those catchment areas. The average ticket price in an Utsav theatre is 40-45 percent lower than PVR’s regular price.―Business Standard

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