Saudi cinema move will boost foreign investment, says Red Sea Mall exec

Saudi Arabia’s recent decision to lift the 35-year-long ban on commercial cinemas in the country will boost not just the entertainment segment, but also related sectors, Aidrous Al Bar, executive board member of Red Sea Markets Ltd Co., told Argaam. Al Bar, whose firm owns the Red Sea Mall in Jeddah, said the mall is in talks with cinema operators to lease movie theatre facilities.

Q: How will Saudi Arabia’s move to allow cinemas impact related sectors in the country?

A: We see a positive impact on retail sector with increased sources of revenue from entertainment segment. The announcement supports job creation and signals potential growth for Saudi film production.

Allowing cinemas will also send a signal to international investors that Saudi Arabia is changing. It opens new doors for partnerships and investment opportunities from abroad.

Movie theatres can expect to generate significant returns since they mainly cater to the youth, which is the largest section of Saudi Arabia’s population.

Q: Malls are said to be already preparing to include movie theatres. What is Red Sea Mall’s strategy?

A: Red Sea Mall is in talks with cinema operators in the region for leasing full-fledged movie theatre facilities, among other mutually beneficial plans. The mall's management has several ideas under discussion that will be added to the current bouquet of services. The potential mall operator appointment will be announced in due course.

Q: What impact do you foresee on shopping centers/malls in terms of footfall and time spent?

A: Malls may see footfall rise between 20 percent and 25 percent, as they will be able to offer more entertainment options, beyond food & beverages and shopping.

The duration of visit will be extended since cinemas cater to the ‘entire family segment’ and show timings usually run from early afternoon to late night.

People who used to travel to watch movies in the region will reconsider their trips given that the cinema option will be available in Kingdom

Q: What are the possible challenges that shopping malls might face?

A: Managing a large crowd is not that big of a challenge for the Red Sea Mall. As for other challenges such as extending working hours/late hours and managing mixed-gender crowd all of this will be handled as directed and issued by governmental authorities’ decisions.

Q: Will the move impact rents at malls in Saudi?

A: Allowing cinema will positively affect the entire retail business enabling organic growth as it will increase traffic, which in turn will create potential growth for both the tenants and the landlord. 

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com