Three Major Multiplex Chains Share COVID-19 Burden... Rent Reduction

The CGV Sungshin Women's University Entrance branch in Seongbuk-gu, Seoul, confirmed as a location visited by the fifth confirmed case of the novel coronavirus infection, has suspended operations for the second consecutive day on the 2nd. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jonggil Lee] The three multiplex chains will reduce rent for tenants struggling due to the novel coronavirus disease (COVID-19). The purpose is to minimize the difficulties faced by tenant businesses and to overcome the COVID-19 crisis together.

Recently, CGV decided to reduce rent by up to 35% for leased stores or subleased (re-leased) stores located in buildings they own. A representative stated, “In addition to rent reductions, we provide customized support measures tailored to the situation of tenant businesses, such as temporary closures, early termination, and extension of contract periods.”

Lotte Cinema is also considering rent reductions at a similar level. Since each tenant has different requests, various win-win measures are being explored. Megabox has already reduced last month’s rent by up to 30% for leased stores located in buildings they own, such as the Seongsu branch.

The damage suffered by movie theaters and tenant businesses due to the spread of COVID-19 is considerable. The daily average number of viewers this month is 76,062 (as of the 5th). Since the 16th of last month, there has not been a day with more than 300,000 visitors. There have also been eight days with fewer than 100,000 visitors.

Movie theaters, having significantly increased the number of screens, suffer enormous burdens from rent, labor costs, and more. Theaters visited by confirmed COVID-19 cases cannot even open. Each theater has entered an emergency management system and devised self-help measures. The management voluntarily returned 20% of their salaries last month. Headquarters employees also switched to a four-day workweek.

The decision to reduce rent amid these harsh realities is expected to greatly help not only in fostering a win-win relationship but also in overcoming the crisis. Mr. A, who operates a healing cafe at CGV Ilsan, said, “As theater audiences decreased, cafe customers also dropped, making rent burdens significant, but the theater’s understanding of our difficulties is a great help.” He added, “I hope the COVID-19 spread calms down quickly so many people can visit theaters.”

Mr. B, a branch manager of a local movie theater, said, “Since headquarters made a difficult decision, we will unite with tenant business representatives to restore the situation. We will use this incident as an opportunity to expand our cooperative relationship.”

This content was produced with the assistance of AI translation services.