A landmark North Yorkshire cinema has been launched on the market as a leisure investment opportunity for potential landlords.
The opportunity to acquire the freehold interest in the Grade II listed 1930s Picture Palace in Harrogate, has been brought to market by CBRE’s operational real estate team.
The prominent building is leased on a 25-year term to the UK’s largest cinema operator, Odeon Cinemas Limited, and has a 16.3-year unexpired term with annual RPI-linked rent reviews subject to a 1% collar and 5% cap. Offers are being sought in excess of £7m. reflecting a 7% net initial yield.
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The impressive building was constructed in 1936 for Odeon and has been operated by the movie group ever since, undergoing a comprehensive refurbishment in 2008, with Odeon being the main operator of its kind in the town.
Based on East Parade on the edge of Harrogate town centre, the five-screen cinema has 892 seats set in 23,971 sqft of space, and holds partial ownership of an 88 space car park.
CBRE says acquiring the cinema as an investment marks a unique opportunity, with the UK cinema sector recovering well following the impact of the Covid-19 pandemic.
When averaging 2021’s weekend gross box office revenue, takings finished at 69% of the 2019 average weekend taking - the second highest grossing year on record.
This year is set to be an exciting time for the sector, with movies slated for release including Marvel’s Thor: Love and Thunder, Jurrassic World Dominion, Top Gun Maverick and the sequel to the highest grossing film on record, Avatar.
Set 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 of 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% of 2019 levels which makes this a timely opportunity.”
