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Cinema - Future Proofing at Northern Gateway Colchester

Thursday, 20 October 2022

First of all, the 55,000 sq ft building spans three floors, rather than being all on one level. Then there is what’s inside: alongside seven cinema screens, there are 10 bowling lanes, mini-golf, a retro arcade, a climbing centre, interactive darts and a karaoke room.

At a time when cinema companies such as Cinewold have been pushed to the brink of bankruptcy because of Covid restrictions and rising competition from online streaming services, operators such as The Light are having to adapt to survive. “As a sector we are still in recovery mode,” says Keith Pullinger, The Light’s co-founder.

“We’ve not only had to deal with lockdown closures but changes to how film is released and the rising costs of staff, utilities and food. At the same time, consumers have more choice than ever when it comes to entertainment. We recognised that we needed to give them more reasons to come other than just seeing a film. Our approach provides new revenue streams and makes our business model more viable.”

Assets that were good for the 1990’s won’t survive in the 21st century

John Sullivan, The Light

Lockdown restrictions also affected film production, which has resulted in operators having fewer films to show. At the same time, the exclusivity window given to cinemas by the studios has continued to shrink and many big lockdown releases went straight online. Over-leveraged big-box cinemas with a plethora of screens and seats have unsurprisingly felt the strain.

John Sullivan, non-executive director of The Light and founding director of cinema consultancy The Big Picture, believes that traditional multiplexes will struggle going forward.

“Assets that were good for the 1990s won’t survive in the 21st century,” he says. “To succeed, they must adapt to changing customer expectations and be realistic about the release schedule.”

Immersive experience

When customers do venture out to the cinema, they want to be immersed in a way that is just not possible in front of a large-screen TV in their living room.

Stuart Burdon-Bailey, director of property consultancy EDIT Leisure, has worked with a number of cinema operators. He believes customers are “craving an experiential offer”.

He adds: “If they are going to make the effort to go to the cinema, they are going to do it right. They want reclining seats, the very latest screen technology, better-quality food and first-class customer service. That’s where the market is heading and those operators prepared to adapt to meet those demands will do well.”

Matt Ashman, head of leisure and restaurants at Cushman & Wakefield, says cinema operators have no option but to adapt. “People now want to spend more of their money on experiences than material things, and cinema can capitalise on that, but not by building a big box with lots of screens,” he says.

“Operators will be competing with other leisure operators to anchor new developments and they need to up their game.”

The Light is busy seeking new chances to do just that. Its focus is on identifying locations where it can provide the key draw, either within new development projects or repurposed assets.

Pullinger wants to put the brand at the heart of urban regeneration projects and is engaging with key stakeholders such as local councils to make this happen.

In Redhill, for example, The Light has become an anchor tenant for Reigate & Banstead Borough Council’s town centre development, while Kirklees Council is providing a loan to incorporate the brand in the former House of Fraser store in the Kingsgate Centre in Huddersfield.

As local authorities look to breathe life back into their urban centres, cinemas remain an appealing proposition. In Colchester, Canada Life has agreed to forward-fund Turnstone Estates’ mixed-use development Northern Gateway.

The development sits on land owned by Colchester Borough Council that has been allocated for leisure – and to help make the scheme viable, the local authority has taken an overriding lease with a full buy-back after 35 years for £1.

Due for completion in September 2023, the project incorporates a number of leisure components, anchored by a 12-screen Cineworld. However, given that operator’s financial woes, the future of the development now hangs in the balance.

Chris Goldsmith, managing director of Turnstone Estates, remains confident Cineworld will rearrange its finances and adapt to changing times.

“Cinema will continue to be an effective anchor for projects like this, driving footfall and encouraging people to come out for the evening for an immersive experience,” he says. “It is the type of amenity local authorities want in their towns and their support will prove critical in getting schemes off the ground.”

Repurposed space

The Light is currently talking to landlords to identify opportunities for venues ranging from 35,000 sq ft to more than 70,000 sq ft and is using the services of KLM Retail to help it secure space.

“Much of the focus will be on repurposing existing space and we’re talking to landlords and shopping centre owners about how we can work together,” says Oli Marcroft, KLM Retail’s head of leisure. “A lot of department store units, for instance, have come back on to the market and they present us with a real opportunity.”

Marcroft admits that retail spaces can be hard to repurpose for cinema, especially with their limited floor-to-ceiling heights, but adds: “Landlords and tenants need to come together to find creative solutions to make those spaces work, both operationally and financially. There are always ways and means.

“Landlords need to think hard about what they want to achieve with their asset and take a longer-term view about the impact cinema will have on the overall scheme’s performance.”

Marcroft says it has had some very positive conversations with major landlords about repurposing department stores. “If both parties are flexible and willing to collaborate, anything is possible,“ he says. “It is different for every building and it is important not to take a cookie-cutter approach.”

The Light’s Pullinger believes that the cinema has a bright future – but only if operators are willing to adapt.

“They have to keep evolving and exploiting opportunities to improve and upgrade,” he says. “The sector has not always been great at embracing change, but it’s time to push the boundaries. There may be casualties along the way, but we have to accept that doing what they have always done is no longer an option.

“The magic of cinema is compelling but the USP of being the only place people can see a film is drifting away. You have to offer more.”

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