An opportunity to acquire the freehold interest in a Grade II Listed, 1930’s Picture Palace in Harrogate has been brought to market by CBRE’s Operational Real Estate team.
Leased on a 25 year term to the UK’s largest cinema operator, Odeon Cinemas Limited, the property benefits from a 16.3 year unexpired term with annual RPI-linked rent reviews subject to a one per cent collar and five per cent cap. Offers are sought in excess of £7m, reflecting a seven per cent Net Initial Yield.
Situated on East Parade on the edge of Harrogate Town Centre, the five-screen cinema contains 892 seating provisions within a 23,971 sq ft gross internal area and holds partial ownership of an 88 space car park.
Built in 1936 for Odeon and operated by them ever since, the cinema was comprehensively refurbished in 2008 and is a well-known landmark in Harrogate, with Odeon being the main operator of its kind in the town.
CBRE reports that the UK cinema sector is recovering well following the impact of the Covid-19 Pandemic: when averaging 2021’s weekend gross box office revenue, takings finished at 69 per cent of the 2019 average weekend taking which was the second highest grossing year on record.
2022 is set to be an exciting year for the sector, with one of the finest film slates of the past decade including several Marvel films and the sequel to the highest grossing film on record, Avatar, scheduled for release.
Located a short walk from the town’s retail core with global brands and a diverse restaurant and bar offering, the cinema is also directly opposite Harrogate Station and adjacent to the A61 making it ideally positioned to attract the high footfall levels.
Alfie Stephenson, CBRE’s Operational Real Estate Team, said: “This iconic building has prospered under the operation of Odeon since it opened and is a firm fixture on the Harrogate leisure scene.
“The long-income investment opportunity enables a keen investor to acquire the freehold interest on a cinema leased to the UK’s largest operator on a term that benefits from annual RPI-linked rent reviews. Our research shows that the cinema sector is set to have a strong 2022 with attendances anticipated to return to 100 per cent of 2019 levels which makes this a timely opportunity.”