DLA Piper has advised ADG group, a pioneering Russian urban developer, on the establishment of a joint venture with South Korea's CJ CGV, the fifth largest multiplex theatre company in the world. ADG Group holds a 30% stake in the JV with a registered capital of US$30 million, while CJ CGV holds all the remaining shares.

The transaction marks the first entry of a major foreign player into the Russian cinema market – the 14th largest cinema market in the world, making up 1.9% of the world box office in 2016. The two companies are planning to further invest more than US$70 million in the JV to make it the leading cinema operator in Moscow.

The joint venture will become an anchor tenant in ADG group's Neighbourhood Centres project. The 33 cinemas will offer a choice of Russian and international films on 160 screens. In 2014, ADG group acquired 39 outdated cinemas located in Moscow's densely populated urban areas in order to redevelop them as Neighbourhood Centres – a new commercial real estate asset class, where the potential of physical locations is complemented by online infrastructure, all the essentials in a convenient and comfortable environment together with a superior customer experience, while respecting the interests of local communities.

DLA Piper advised ADG group mainly on corporate and tax issues, including participating in negotiations and performing a due diligence investigation of the assets.

Led by Julien Hansen, Corporate partner and Head of Russia's English Law Team, DLA Piper's team included Igor Venediktov, Tax partner, and Tsvetan Naidenov, Corporate associate, all of the Moscow office.