LondonMetric Property has exchanged on the sale of an Odeon Cinema for £13.7m, while acquiring an urban logistics asset in Milton Keynes for £12m in a separate deal.
The cinema deal reflects a 4.8% net initial yield, while the logistics transaction represents a net initial yield of more than 5%.
The cinema at Warrington, which has 10 screens, measures 36,000 sq ft. It formed part of a portfolio of 10 Odeon cinemas bought in 2013 at a yield of 7.3%.
Completion of the cinema sale, to an unnamed institutional pension fund, will be delayed until December 2018. This is to allow LondonMetric to implement an asset management initiative, which could 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 located adjacent to the M1 and was comprehensively refurbished in 2013. It is let at a rent of £3.20 per sq ft.
Andrew Jones, chief executive of LondonMetric, said: “Our 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.”
Knight Frank represented LondonMetric on Warrington. At Milton Keynes, JLL advised LondonMetric while the vendor instructed Kimmre and Savills.
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