Cathay Cineplexes’ rental arrears unlikely to impact FCT’s bottom line

DELAYED rental payments by cinema operator Cathay Cineplexes to its landlord Frasers Centrepoint Trust (FCT) will not significantly impact the trust’s bottom line.

Nevertheless, this could indicate a “structural issue” among cinema operators facing declining attendance at cinemas and signal the consolidation of cinemas to malls with higher footfall, said analysts.

Background

On Jan 28, Cathay Cineplexes, which is operated by mainboard-listed media company mm2 Asia, received letters of demand for about S$2.7 million in rental arrears from the landlords of two retail malls where it operates.

The malls are Century Square, which is in Tampines, and Causeway Point, which is in Woodlands. Both properties are owned by FCT.