Leading Russian Theatrical Exhibition Company KARO and Urban Property Developer ADG Announce Large-Scale, Multi-Site Expansion Plans for the Moscow Market
Anticipating continued recovery for the Russian cinema sector KARO and ADG Group today jointly announced an expansive, multi-site partnership that calls for KARO: New Generation multiplex cinemas to be opened and operated in ADG Neighborhood centers throughout Moscow.
The partners acknowledge that like all major economies Russia is facing significant challenges due to the pandemic threat of the COVID-19 coronavirus. Nevertheless, the parties believe that Russia has already begun to help lead recovery for the global cinema sector. The announcement today cements that belief, as the partners continue their plans to provide a world class movie-going to presently underscreened and underserved neighborhoods in Moscow.
KARO will open in the fourth quarter of 2020 and the first part of 2021 six venues in ADG centres located in the Moscow neighborhoods of Rassvet, Neva, Mars, Vysotta, Elbrus and Budapest. Additionally it is expected that four more Karo locations in Kyrgizia, Ekran, Baikanour and Sofia will open by the middle of 2021 and the partnership assumes opening more cinemas with additional 140 screens by the end of 2022. Each KARO venue will present state of the art, high concept of new generation cinemas, each with ultra modern screen and sound technologies, full recliner seating, automated ticketing systems and “u-choose” food and beverage areas.
This announcement follows the recent agreement between KARO and ADG in which Moscow cinema locations at Salaris and Angara were reorganized and rebranded into KARO cinemas. These former CGV sites are now fully owned by ADG and the company is delighted to include these sites in the fast growing partnership with KARO.
Paul Heth, Executive Chairman and CEO of the KARO Group and Olga Zinyakova, KARO Cinemas President said in a joint statement, “Being a many year leader in the overall Russian cinema sector, we are very excited to announce this major new expansion initiative for Moscow with ADG. Moscow itself is one of the most important city/urban markets for film in Europe, and we are thrilled to continue the growth of KARO in this our home market . We are constantly focused on shaping and improving the Moscow cinema choice for our patrons. Today’s moviegoers needs and expectations are ever changing, and this partnership with ADG is one of the ways we can offer an amazing new cinema experience in a KARO format directly near their homes”, said Heth and Zinyakova.
Bob Mayson, Managing Director of the ADG cinema design and build program said; “The transformation of these historic locations into Neighborhood Centers and meeting places is a serious and extremely important task! When the Moscow City government approved us to take on this project, they entrusted us with delivering better services and experience to residents in their home locale”. He went on to say, “I am delighted that we have struck this transformative and dynamic partnership with KARO as they represent the best of what modern cinema is all about, and the way they have adapted their business model to provide a world class movie goingexperience in our venues is just outstanding”.
About the Russian Cinema Sector
Russia is one of the worlds most dynamic and growing markets for filmed entertainment. Russian cinemas attracted a record 216.3 million visitors in 2019, the third consecutive year when admissions reached over 200 million, a figure that has doubled since 2007. Russia managed once again, as in 2017 to lead all European markets in theatrical admissions. Theatrical box office receipts in Russia in 2019 was 55.4 bln rubles making it one of the top overall international markets for major studios and independent producers. Local production accounted for 22.1 percent of the overall box office. The success of local production is a major factor in the continued growth and sustainability of the Russian film sector.
The KARO cinema chain which was founded in 1997, has set a new standard for the theatrical exhibition industry in Russia. Today KARO is one of the leading, and most technologically advanced cinema chains in the country with 32 modern cinemas and 262 screens in Moscow, the Moscow region, Saint Petersburg, Yekaterinburg, Samara, Kazan, Kaliningrad, Tyumen and Surgut, KARO operates five of Russia’s top ten highest grossing cinemas to include the number one and number two cinemas, KARO Sky 17 at AviaPark and KARO Vegas 22.
KARO Cinemas are visited by over 12 million people annually. In addition KARO leads the Russian cinema sector in online engagement. In 2017 KARO was named by international Convention “CineEurope” as the best European cinema circuit, chosen from among 18 other cinema chains from 37 countries. Since 2012, the major and controlling owner of KARO is a consortium of investors consisting of UFG Private Equity, the Russian Direct Investment Fund (RDIF) and Paul Heth, a filmed entertainment entrepreneur, known as a visionary leader and pioneer in the modern Russian cinema industry.
About ADG Group
In 2014, ADG Group acquired 39 outdated cinemas located in Moscow’s densely populated urban areas in order to redevelop them into Neighborhood Centres – a new commercial real estate asset class. The project’s mission is to revitalize the historical centres of gravity of these locations and to bring new quality of urban life and retail convenience to over 2.5 million Muscovites living in 15-minutes walking distance from these sites. Neighborhood centres offer their visitors everything for a quality time spending and proximity shopping, providing all the essentials in convenient and comfortable environment with a superior customer experience and respect to the interests of local communities. The potential of these physical locations is enlarged by the project’s online infrastructure in order to deliver both omnichannel sales and communications.