Vizag to have its first multiplex in June 2007

Hyderabad builder to invest over Rs 10 crore for its construction

Visakhapatnam is all set to have its first-ever multiplex.

Visakhapatnam Co-operative Central Stores Limited (Vizag Super Bazaar) has allotted one acre of land to Hyderabad-based Sweety Builders, a subsidiary of G S Gupta Companies, for the construction of a multiplex, including a huge shopping mall, in the old town area here on build, operate, transfer (BOT) basis. The multiplex will commence operations from June 2007.

Sweety Builders would invest more than Rs 10 crore for the construction of this mall-cum-multiplex, M S N Murthy, managing director, Vizag Super Bazaar, told Business Standard.

"We have allotted one acre of land to Sweety Builders for a 33-year lease. As per the terms of the lease, they will construct a shopping mall-cum-multiplex with their own funds and operate it on their own. The builder will pay a monthly rental as per the terms of the contract during the lease period of 33 years," he stated.

The builder would construct one lakh square feet of mall, including a cellar and a sub-cellar, with parking space for 300 cars and 900 two-wheelers. While the shopping mall would come up on the first and second floors, children's entertainment and toy centres would be housed on the third and fourth floors.

The fifth floor would have the proposed multiplex with four screens. Each theatre would have a seating capacity of 300, he said.

In the first year, the Hyderabad builder would pay Rs 1.70 lakh per month as rental to the Vizag Super Bazaar and the rent in the 33rd year would be Rs 10 lakh per month, Murthy said.

According to him, the financial position of the super bazaar improved after leasing of the property.

"In spite of our annual turnover of Rs 12-14 crore, our accumulated losses touched Rs 1.5 crore by the end of March 2005. However, in 2005-06, we gained an operational surplus of Rs 40 lakh, thanks to the Rs 22 lakh rental paid by Sweety Builders," he said.

Despite severe competition from several private malls like Big Bazaar, Spencer's, Trinetra and Fresh Choice, Vizag Super Bazaar is expecting a turnover of Rs 15 crore, according to Murthy.