GLOBAL ENTERTAINMENT

GLOBAL ENTERTAINMENT MAJORS TALK TO REALTY MAJORS FOR

INDIA SHOW.

Foreign entertainment giants are eyeing tie-ups with Indian real estate developers for a chain of multiplexes across the country to tap the craze for movies. Industry executives say that global majors such as Time Warner and Australia’s Hoyt’s are in talk with developers such as the DKF group and Sobha Developers in the south and may buy property in India in JV.

The Australian media mogul Kerry Packer and his Channel 9 have already made clear their intentions to become a long-term player in the Indian entertainment industry by foraying into activities ranging from film production to building multiplexes. South Korean multiplex operator Mega box is also believed to be looking at the Indian market .This will ultimately boost buying property in India

All these players are contemplating two options—buy property in India outright or get into a partnership. An alliance will get them properties in prime locations in major cities, something which they may not have managed if they had bought property in India done it alone. For real estate developers, it ensures a readymade customer and the possibility of the higher footfalls having a ripple effect, especially if the multiplex is part of a big mall.

While talks have been initiated by foreign players, they are still at a nascent stage, and merchant bankers point out that deals will be likely to struck in the next six months to a year and that multiplexes will be operational in the next two years. However, the trouble with the sudden spurt in the multiplex growth is that the initial frenzy to grow, multiplex owners are not being able to build a profitable business as the rates of property in India are sky-rocketing day by day.

Despite all the hoopla around multiplexes, the average occupancy levels have hovered around the 40%. Also, traffic to a multiplex is usually skewed towards the weekend with occupancy levels going up to 95% but witnessing a dramatic fall during the week, down to 25%. Experts say that once multiplexes begin cutting into each other’s territories, average occupancy levels could plummet to 30%.

Given the scenario, and the already close proximity between multiplexes, ensuring traffic and competitive pricing will pose to be challenge in times to come. Nevertheless, foreign players view the Indian property market as an emerging, one and believe that there is a lot more scope to build scale in the field of properties in India.

Courtesy: ET dtd 13-04-07