LondonMetric sells Odeon cinema, buys logistics warehouse

LondonMetric Property on Wednesday said it had it had sold an Odeon Cinema in Warrington to an institutional pension fund for £13.7m and acquired a logistics warehouse used by Royal Mail in Milton Keynes for £12m.

The 10 screen cinema formed part of the portfolio of 10 Odeon cinemas acquired in 2013 at an overall yield of 7.3%, the company said.

Completion of the sale will be delayed until December 2018 allowing LondonMetric to implement a potential asset management initiative that would result in an additional payment.

At Milton Keynes, the 112,000 sq ft urban logistics warehouse is let to Royal Mail for a further 10 years. The warehouse is let at a rent of £3.20 per square foot and there is an outstanding rent review from May 2018 which was expected to increase the rent by over 80%.

Chief executive Andrew Jones said the Odeon cinemas “continue to generate strong income and capital returns and we have responded to investor demand for property than can deliver long, predictable and growing income”.

"We will continue to recycle sale proceeds into expanding our urban logistics portfolio. The Royal Mail warehouse is an attractive addition offering a very strong location, high occupier contentment and income certainty with significant reversionary potential."