Leicester Square flagship among six cinemas up for sale
Estates Gazette 01.07.2006
Vue follows MBO with £80m leaseback offer
Vue Entertainment has put its flagship cinema in London's Leicester Square up for sale, following last month's £350m management buyout.
The cinema developer and operator has appointed HP Four to sell a portfolio of six cinemas, including the 65,000 sq ft Vue Leicester Square, for £80m - a 5.5% initial yield.
The properties - in Accrington and Bury in Lancashire, Cambridge, Doncaster, York and London - are Vue's only freeholds and will be sold on a leaseback basis.
Vue will take 15-year leases on all except its West End flagship, where it will take a 30-year lease. The leases will have fixed yearly increases and open-market reviews every five years.
The portfolio is expected to attract interest from traditional sale-and-leaseback purchasers including London & Regional, Consensus, Topland and Golfrate, as well as institutions and the major listed property companies.
A source said: “You are buying a good covenant with a good income flow. There are also development opportunities. The cinema in Bury is on 7 acres next to an ASDA and York is on 8 acres next to a Tesco. At both Bury and York you could put another unit on the site to improve income.”
Proceeds from the sale will help Vue finance its ambitious expansion programme. It plans to open around 15 new cinemas over the next two to three years.
