VietNamNet Bridge – The attractive profits from movie production and distribution have prompted investors to expand their cinema chains.
In the fourth quarter of 2014, CGV, belonging to the South Korean CJ Group, officially opened its modern cinemas at Aeon Mall in Binh Duong Province.
Prior to that, Lotte Cinema, also a fellow countryman from South Korea, began “attacking” the HCM City suburb market when it opened a Lotte Shopping Mall in Thuan An town.
The biggest advantage of Lotte Cinema is that wherever there is a Lotte shopping mall, there will be Lotte cinema. The investor will not encounter difficulties in seeking retail premises to develop movie houses, especially in areas outside Hanoi and HCM City.
By the end of 2014, Lotte Cinema had 16 movie houses in Hanoi, HCM City, Da Nang, Vung Tau, Phan Thiet and Nha Trang. Over 70 percent of the cinemas are located within Lotte marts, while the others are on the grounds of other retailers including Big Ca and Maximark.
A senior executive of Lotte Group said Lotte plans to develop 60 shopping malls in Vietnam by 2020 and to raise the number to 100 in the future. As such, Lotte Cinema is believed to own more than 70 cinemas in Vietnam in the near future.
As for CGV, the opening of cinemas at Aeon Mall Celadon Tan Phu and Aeon Mall Binh Duong showed that the investor will be together with Aeon, the Japanese retailer, in developing new shopping malls.
Local newspapers reported that Aeon plans to develop 10 shopping malls in Vietnam by 2020.
Analysts noted that developing shopping malls with multi-functional entertainment areas is a growing trend in Vietnam.
The investment model allows savings on investment costs, while cinema developers can take full advantage of shopping mall customers.
Domestic investors have also poured big money into cinema complex projects.
BHD just opened BHD Star Pham Hung at Satra Pham Hung Shopping Mall in January 2015.
Meanwhile, Galaxy, after opening Galaxy Kinh Duong Vuong in district 6, HCM City, is now preparing to open an entertainment park at Co-op Mart Quang Trung in Go Vap District.
In general, a CGV projection room requires an investment of $1.5 million. Meanwhile, Vietnamese investors spend VND2-12 billion on a cinema with five projection rooms.
However, analysts warned that cinema developers’ strategy to expand their chains may meet obstacles as the retail premises for lease are becoming scarce.
A report of Savills Vietnam, a real estate service provider, said that from 2015, about 1.3 million square meters of retail space in 62 projects would join the market.
However, only 25 percent of the total projects are under construction or are near completion.