LondonMetric sells two properties for £18.6m

LondonMetric Property has exchanged on the sale of an Odeon Cinema in Derby and a retail asset in Guisborough for £18.6m, it announced on Monday, reflecting a blended net initial yield of 4.8%.

The FTSE 250 firm said that at Derby, the 10 screen, 37,000 square foot cinema formed part of a portfolio of 10 Odeon Cinemas acquired in 2013 at an overall yield of 7.3%.

It continued to own five Odeon cinemas with a weighted average unexpired lease term of 21 years, and rents that rose annually in line with RPI between 1% and 5%.

At Guisborough, the 26,000 square foot scheme was let to Aldi and Iceland for a further 12 years, and was acquired in 2014 at a net initial yield of 5.8%.

LondonMetric’s board said the sales reflected a 15% premium to the March valuation and materially above the latest valuation.

“These assets have generated strong returns from both income and significant yield compression, as investors increasingly look for reliable and predictable income streams,” said chief executive Andrew Jones.

“The uplift in valuation over book value demonstrates the strength of the current market for long income with guaranteed growth in liquid lot sizes. Furthermore, it provides strong support for our portfolio valuations.”