How Real Estate Slowdown Affects Bollywood

“Because of the slowdown in the number of malls in the real estate getting developed and also because of high expectations of rental from the developers as it is just not viable to operate a mall at about 55 to 60 per square feet of rental. A multiplex has to operate with the kind of area that we occupy, it has to be well within 35 to 40 per square feet,” said Anand Vishal, senior VP, Fun Cinemas.

Fewer supplies of malls have mainly affected the Tier 1 cities which form a major amount of the total market. In 2012, the supply of malls has dropped by over 60 percent due to slow economy, according to DTZ sources, reports NDTV Profit.

Pune witnessed the maximum decline of 87 percent from the last year, followed by metros like Delhi and Mumbai that witnessed a drop of 70 percent and 72 percent, respectively. Consequently, in the last one year multiplexes have seen the drop of about 150 new screens in India.

Perhaps, this abovementioned scenario is mainly because developers are now focusing more on building residential projects that gives profit margins and better returns. Also, developers find the residential segment more lucrative than constructing malls, which in turn affecting Bollywood industries to a great extent.