Going out

b
Going out
Entertainment – No longer just an anchor tenant…
2 Advance •Going out • March 2011
Shopping centres are no longer just places to make purchases – they are destinations,
places to spend time with family and meet friends in a comfortable environment.
Shopping centres as entertainment destinations are becoming as important as home
and work, and it is the basis for the development concept of large shopping centres.
Moreover, with on-line shopping slowly gains market share, making a trip to the mall
less necessary and relevant, thus increasing the added value of entertainment in a
shopping centre. Based on this concept, developers look for ways to make shopping
centres an important aspect of social life, where people come for family fun and
entertainment; where shopping is part of that experience and not the reason for it. In
this regard, entertainment becomes one of the attracting anchors that could facilitate
this concept’s formation, create additional footfall, increase length of stay and
consumer spending, therefore affecting shopping centre success rates although not
very profitable for a landlord.
The idea of positioning a shopping centre as a place to spend leisure time is gradually
becoming popular in Russia. Of the shopping centres1 in Moscow and St. Petersburg,
70% and 78% respectively have introduced entertainment programmes. The share of
entertainment in shopping centres in terms of leased space is 10% and 15% in Moscow
and St. Petersburg respectively.
Entertainment in some form is part of the tenant mix, whether it is background music,
seasonal decorations, a central mall court with periodic fashion shows, concerts, or
festivals. The most frequently used entertainment format in Russia is a cinema. Other
forms of entertainment include bowling and billiard centres, shooting galleries,
recreation areas and demonstration halls, playgrounds for children, entertainment parks
and other attractions. Also popular are skating rinks and rollerdromes. As the
attractions becoming more alike, the need for something new and unique is more
apparent. In this report we will look at entertainment diversity in Moscow and St.
Petersburg.
Share of entertainment units in total number of SCs
% share of SC, where the tenant exists
90%
80%
70%
60%
50%
40%
30%
20%
10%
St. Petersburg
Moscow
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0%
Europe
Source: Jones Lang LaSalle
1
In this report, the term shopping centres refers to quality shopping centres only.
3 Advance • Going out • March 2011
Cinema, cinema, cinema…
Multi-screen theatres (multiplexes), still the
most popular tenant for shopping centres (SC),
occupy more than half of entertainment areas
in SCs in Moscow and St. Petersburg. About
50% (of the 79 existing projects) of Moscow’s
SCs and 53% (of the 40 existing projects) of
the St. Petersburg SCs have cinemas. In
Europe this figure is much higher, accounting
almost 80% of projects.
Despite cinemas are very popular and have
high level of presence in SCs, Moscow and St.
Petersburg do not have the level of
concentration of cinemas seen in Europe,
where developers’ interest in cinemas is
declining. Fading interest in cinemas in Europe
could be explained, in part, by low yields,
which, due to rental levels, are among the
lowest of SC tenants.
Usually, multiplexes function as an anchor,
attracting customers to the upper levels of
shopping centres where cinemas are located.
The additional flows generated by cinemas
increase footfall in surrounding stores. This
allows landlords to ask relatively higher rental
rates for the premises near the cinema
compared with other premises on the same
floor, which are usually less popular among
retailers because of their location on the upper
floors of the building.
Moreover, almost every modern SC in Russia
now has a multiplex, which has diminished the
uniqueness of this type of tenant. Many
cinema operators are now modernising,
offering a 3D viewing experience as a way of
re-establishing uniqueness. Another way of
attracting visitors is the IMAX format. Although
the technical requirements for the premises
(ceiling height being the most important)
significantly constraints this choice for SCs. It
could be very popular in new projects, which it
is now in Eastern Europe. An IMAX cinema
hall is also beneficial to the SC in terms of
customer flows, because it is geared to solvent
buyers.
Cinemas commonly found not only in large
regional or super-regional SCs, but relatively
small SCs as well. Examples of smaller SCs
with cinemas are Varshavskiy, Kaluzhskiy and
Bum in Moscow, Uliyanka, Capitoliy and
Atmosphera in St. Petersburg.
Cinema Park-Starlight in Filion, Moscow
Sources: Jones Lang LaSalle
Cinemas in shopping centres comprise around
26% of the total number of all cinemas in
Moscow. Of the cinemas located in SCs, 94%
are operated by movie theatre chains. Of the
movie theatre chains, 50% operate exclusively
in SCs. Shopping centres offer cinema
operators more advantages than standalone
buildings:
Rental rates for cinemas are not high due
to the large amount of space leased and
their high investments into equipment and
fit-out
A cinema in a shopping centre saves time
and money in terms of obtaining permits,
construction and leasing of concession
zones.
4 Advance •Going out • March 2011
There are already 39 cinemas operating in the shopping centres in Moscow, translating into a total of 239 screens and around 41,771 seats. Single
screen theatres are usually located in soviet-era standalone buildings (i.e. Illusion on Kotelnicheskaya Emb., Pervomaisky on Pervomaiskaya Str.).
Miniplexes are the most frequented and popular format in Moscow. Currently, the largest cinema, with 16 screens, is KinoStar New York located in
MEGA Belaya Dacha. In March of 2009 KinoStar New York opened its 16th screen: a digital IMAX cinema hall. It is, and has always been, the only
largest multiplex in terms of number of screens in Moscow. Coca-Cola IMAX KinoStar was the second IMAX cinema to open in Moscow after Nescafe
IMAX in Auchan City– Leningradskiy SC, and was the first one equipped with IMAX digital projection technology.
St. Petersburg offers visitors 21 cinemas (a total of 147 screens and around 25,800 seats) in quality shopping centres. The largest cinema operators
in the city are Karo Film and Kronverk Cinema, each with over 40 screens and 6,000 seats. Presently, the largest cinema, with 14 screens, is
KinoStar City located in Raduga shopping and entertainment centre (SEC). KinoStar City currently also offers IMAX cinema hall in St. Petersburg.
The other one existing IMAX theatre is Formula Kino in Galeria SEC. Another two IMAX halls will be opened soon in existing Kontinent SEC with
KARO Film as an operator and in new phase of City Mall SEC in a new Kronverk Cinema multiplex.
In 2009-2010 almost 70% of the new Moscow
shopping centres had a cinema as an
entertainment tenant. Of the shopping centres
under construction, almost all of the projects
have cinemas in their tenant mix, two outlet
malls, Fashion House Outlet Moscow and
Outlet Village Belaya Dacha, are exceptions.
This will increase the number of movie
theatres in Moscow shopping centres to 50 in
three years.
To attract and retain consumers, developers
need to offer attractions that can only be found
in their particular shopping centre, even if the
attractions are part of the movie viewing
experience.
A recent example of an enhanced cinema hall
is the AFIMALL City project, which will have an
ultra modern cinema with 4D and 5D
projection technologies. Russian consumers
are already familiar with 4D cinemas (where
3D film combines synchronised visual and
physical effects with water, wind, vibrations
and lights). 4D and 5D cinemas are not very
popular among Russians, and still need to
prove their attractiveness.
Today, cinemas do not limit their concession
zones to selling only popcorn, coke and beer.
For example, some cinema halls have stylish
cafés with wide ranges of alcoholic and nonalcoholic drinks and premium bars with
relaxation zones, such as the one in the
Cinema Park-Starlight in Filion, or thematic
designs, e.g. the KinoStar cinema chain with
its cinema halls styled as cities such as Miami
and New York.
Large multiplexes may also offer several
restaurant options in proximity to the cinema or
attractions that entertain customers until the
movie begins. Options such as these can be
found, for example, in St. Petersburg’s Cinema
Park in the Grand Canyon shopping and
entertainment centre (SEC) or Formula Kino in
the Galeria SEC in St.Petersburg.
Operators try to tailor cinemas to the concept
of the shopping centre. For example, Cinema
Lux in the Vremena Goda SEC, which is
aimed at consumers with higher-than-average
income, offers 3 cinema halls with limited and
spacious seating in comfortable reclining
chairs, and waiters. Amenities such as these
make the experience exclusive and are fully in
line with the SC’s concept.
Russians, having relatively lower income level,
prefer cinema to other entertainment types, as
it is affordable. Thus big screen in Russia is
more popular than in some other countries
(see chart below), providing more room for
cinema expansion.
Cinema footfall: admissions per screen
China
Slovakia
Italy
Germany
Austria
Spain
Croatia
USA
Finland
France
Poland
Bulgaria
Russia
Switzerland
UK
Hungary
Norway
0
10,000
Sources: ChartsBin.com
20,000
30,000
40,000
50,000
60,000
5 Advance • Going out • March 2011
Alleys and tables
Shopping centres also provide entertainment
for the whole family, including bowling,
billiards, shooting galleries and slots.
The undisputed leader of this profile in
Moscow is Cosmik entertainment, which
specialises in bowling, billiards and organising
events. Two of the Cosmik centres (in MEGA
Belaya Dacha and Zig-Zag) offer children’s
playgrounds, providing parents with a kidfriendly destination where they can enjoy
leisure time together.
There is a small number of bowling-only
centres and slots-only halls in both Moscow
and St. Petersburg shopping centres. Unlike
entertainment centres, they do not provide a
full range of services or amusements and are
less popular among developers.
Bowling alleys and billiard halls are more
prevalent in St. Petersburg shopping centres,
which is reflected in the relatively higher share
of this type of tenant in St. Petersburg
compared with Moscow and Europe (43% vs.
10% and 12% respectively). As opposed to
St. Petersburg, bowling operators in Moscow
initially began developing in detached
buildings, and they continue to do so.
The number of billiard-only chain operators in
St. Petersburg is limited. Among the existing
chains are the Hermes clubs in the Adamant
shopping centres (Atmosphera, Balkanskiy,
Nevskiy and Prizma). In most cases, billiard is
offered as additional entertainment in bowling
alleys.
The largest entertainment zones in
St. Petersburg shopping centres, combining
Leading bowling and billiard operators in Moscow
The largest chain bowling operator in
St. Petersburg is the AMF Bowling Club chain,
which manages four bowling centres in SECs
in St. Petersburg (the total number of such
centres in the city is five).
Children entertainment
With major purchase decisions being made by
women, it is important to meet a woman's
needs at shopping destinations. This often
also means meeting the needs of children
when they accompany their mother on a
shopping trip. Game zones and children
amusement parks are an important component
in the shopping centre tenant mix in Moscow
and St. Petersburg. They allow adults to
combine family entertainment with shopping.
About 96% of tenants fitting the children
entertainment profile are children amusement
parks and the other 4% children playgrounds
and game rooms.
The largest children amusement park chains
located in Moscow SCs are: Crazy Park (5
parks), Star Galaxy (3 parks), and Igromax (2
parks). The most developed amusement park
operators in St. Petersburg are GameZona
(4 parks), and Fun City (2 parks in quality
SCs). Another local entertainment operator,
Leading bowling and billiard operators in St. Petersburg
120
Bow ling (alley s)
Billiard (tables)
160
140
120
100
80
60
40
20
Number of alleys/tables in quality SCs
180
Number of alleys/tables in quality SCs
bowling and billiards, are managed by the
developers themselves, not by entertainment
operators. The greatest examples are the
Leader entertainment complex in the Grand
Canyon SEC which has 48 bowling alleys and
112 billiard tables; and, the Pulkovo-3 SEC,
which has the largest bowling club in the city,
with 52 bowling alleys, and a billiard club with
103 tables.
Bow ling (alley s)
Billiard (tables)
100
80
60
40
20
0
0
AMF Bow ling
Cosmik
Planeta-Bow ling
Samolet
Club
Hermes
Bow ling City
Leader
Pulkov o-3
6 Advance •Going out • March 2011
Igrodrom offers children entertainment in SCs
developed by the Adamant Company. Moscow
entertainment operators, such as Star Galaxy,
and Crazy Park are actively developing in
Moscow but not in the St. Petersburg market,
where they are presented with only single
entries. The unique amusement park concept
is Happylon, located in Filion (Moscow). The
operator of Happylon will launch another one
in the recently opened Galeria SEC (St.
Petersburg).
Only 20% of the children’s amusement parks
in Moscow are operated by non-chain
operators, whereas in St. Petersburg this
figure is close to zero. Therefore, the types of
attractions provided by the Moscow and
St. Petersburg parks are very similar. The
standard amusements include Q-Zar,
trampoline, billiards, video games, xd cinema,
labyrinth, carrousel, rock climbing, slots, minibowling, shooting gallery, kids’ café, and a
restaurant. Additionally, amusement parks
offer other entertainment services, including
organising birthday parties, clowns for parties,
and contests and prizes for children.
Playgrounds and game rooms occupy
smaller areas, from 10 sq m to 180 sq m, and
have a narrow range of entertainment,
including swings, toys and slots.
While at entertainment parks children are
usually in the care of their parents, however,
babysitters are also available to look after
them. This provides parents with more
freedom for shopping.
Only 16% of the shopping centres in Moscow
and 25% in St. Petersburg offer classic
entertainment zones with slots and attractions.
The opportunity to have fun is attracting not
only young people, but also parents, who use
children game zones as a place to have fun
with their kids or as a safe, supervised place to
leave their children, while they shop in the
mall.
Figure-skating and hockey
Most of Russians are able to ice skate: girls
dream of figure skating and boys of playing
hockey in childhood. In Russia, it is not
unusual to make an ice rink near one’s home,
but it is not always an ideal situation given
Russia’s cold weather, and their quality is low.
This is the reason skating rinks in shopping
centres are gaining popularity in Moscow and
St. Petersburg.
There are two types of skating rinks: made of
ice and made of plastic panels. Plastic skating
rinks are not popular among the population.
Skating rinks are usually managed by the SC
owners, as professional operators are scarce.
There are 9 skating rinks in quality Moscow
shopping centres. The average rink size is
around 190 sq m. Customers can rent skates
or use their own. Some shopping centres offer
private lessons and season tickets.
Among recently opened Moscow SCs, Gorod
Lefortovo has a skating rink, where a hockey
club organise its trainings.
Five shopping centres in St. Petersburg have
skating rinks in their tenant mix. Two of the
MEGA SCs have skating rinks; there is one in
the Continent SEC on Baikonurskaya Street,
one in the Varshavskiy Express SEC named
Modny Lyod, that has a 500 sq m rink and
hosts curling contests. The largest skating rink
in St. Petersburg was recently opened in the
Mercury SEC. This 1,000 sq m rink offers
visitors night skating, curling contests and a
figure-skating school.
7 Advance • Going out • March 2011
Jump to the future
Ski resort Ski Dubai
Source: Paradiseside.com
Standardisation of entertainment formats leads
to cookie-cutter shopping centres. Every
shopping centre offering standard options (2D
cinemas, the usual attractions, game zones or
bowling) presents little in the way of
entertainment appeal, and as a result making
the location of the SC becomes the major
driving factor for visitors. Entertainment
standardisation in Moscow and St. Petersburg
is following a development path very similar to
that of European SCs. Therefore, Russian
developers are trying to diversify provided
services and offer new types of entertainment.
In St. Petersburg, examples of new types of
entertainment are rollerdrome in Grand
Canyon, an oceanarium in Planeta Neptun,
and an aqua-park in Rodeo Drive. Night clubs
are also a new type of entertainment being
offered in shopping centres: for example,
Varshavsky Express has the Zal Ozhidania
Club, which includes a modern night club and
1,000 seat concert hall; and, the Grand
Canyon SC with the Leader entertainment
complex that hosts club music festivals. Night
clubs in SCs remain a questionable move, as
the customer traffic is not likely to be directly
beneficial to the SC because of the different
working hours. However, it does raise SC
brand awareness.
Some developers are betting on a fresh
interpretation of a familiar tenant format. For
example, Filion is attracting customers with a
new family amusement park, Happylon, which
was founded by the Kazakhstan-based Agat
Group. It is the first theme park of its type in
Russia. Agat Group is operating individuallythemed (magic, pirates, gothic, or jungle).
amusement parks, thereby making each one
unique.
As there is competition among SCs,
developers are to come up with new
amusement components that will allow them to
find their market niche and attract more
customer interest. The recently opened Vegas
offers a theme park with a Ferris wheel and
rock climbing area. Among foreign examples
are a vertical wind tunnel and artificial ski
slopes, like the Ski Dubai, which is constructed
over the parking structure at Mall of the
Emirates in Dubai It features real snow and a
1,200-foot-long (366 meter) indoor ski slope
with five ski runs of varying degrees of
difficulty, toboggan runs, sledding hills and a
tubing run. The attractions can even be nonprofit, similar to the aquarium at the Dubai
Mall.
Design can also serve as an attraction, i.e.
fountains, decorations, and gardens, to name
a few. For example, the AFIMALL City will
have a glass dome (with a total area of 10,000
sq m) and a fountain in the central atrium that
will send a stream of water 23 meters into the
air every few minutes.
Unique attractions are organised for increase
of SC footfall. Usually they are managed by
the landlords, as there are no professional
operators. Yet, unique types of entertainment
are still rare for several reasons:
Technical characteristics of the buildings
can restrict certain types of unique
entertainment
Although unique entertainment impacts
footfall, repeat attendance by the city’s
population is low
Exclusive attractions are expensive to
organise and operate, and have low
yields
As the unique appeal diminishes, there
will be a need to change, aggravated by
the building technical characteristics. So,
decisions regarding unique entertainment
in SCs are left to landlords.
Vegas Park in Vegas SEC, Moscow
Sources: Jones Lang LaSalle
The major types of entertainment are still cinemas, bowling clubs,
and amusement parks. The inclusion of an entertainment component
in a SC tenant mix has become the rule for a successful SC. But
when shopping centres have similar attractions and entertainment,
the need for something new is more apparent. Apart from cinema, to
survive in the competitive Russian environment SCs have started to
offer unique entertainment components, with Vegas Park taking a
first mover advantage.
Olesya Cherdantseva
Head of Retail and Capital Markets Research
Economic and Strategic Research Group
[email protected]
Veronika Lezhneva
Senior Analyst, St. Petersburg
Economic and Strategic Research Group
[email protected]
Jones Lang LaSalle
Moscow, 115054 Russia
Kosmodamianskaya Emb. 52/3
Phone: +7 495 737 8000
Fax: +7 495 737 8011
www.joneslanglasalle.ru
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