LondonMetric sells cinema building, reinvests into urban logistics asset
LondonMetric Property has sold a cinema building to an unnamed pension fund and reinvested the capital into an urban logistics asset which offers greater certainty of occupation.
The real estate investment trust said it has agreed to sell the 10-screen, 36,000sqft Odeon Cinema building in Warrington for £13.7m (€15.5m) and will buy the 112,000sqft Royal Mail warehouse in Milton Keynes for £12m.
LondonMetric said the warehouse is let for a further 10 years.
The property is let at a low rent of £3.20 per square foot and there is an outstanding rent review from May 2018, LondonMetric said, adding that this is expected to increase the rent by over 80%.
The FTSE-250 listed firm said completion of the sale of the Odeon Cinema to the institutional pension fund will be delayed until December allowing LondonMetric to implement a potential asset management initiative that would result in an additional payment.
Andrew Jones, the 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 that 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.”