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UK REIT LondonMetric is acquiring a portfolio of 10 out-of-town multiplex cinemas in the UK from the property arm of the Odeon cinema group.

LondonMetric and Odeon Property Group have exchanged contracts on the £81 mln (€96 mln) transaction.

The acquisitions will be funded with a £43 mln loan provided by Lloyds Bank.

The portfolio totals 36,000 m2 and is let to Odeon Cinema for a remaining term of 24.9 years subject to annual rental increases of between 1% and 5% linked to the annual RPI index. The total initial rental income is £5.9 mln per annum.

The cinemas are located in Chelmsford, Derby, Huddersfield, Lee Valley (London), Merryhill (Dudley), Preston, Tamworth, Taunton, Telford and Warrington. They either adjoin or are in close proximity to a retail park or shopping centre, and in 2012 attracted a combined attendance of 3.8 million visits.

LondonMetric CEO Andrew Jones commented: 'This is a very attractive acquisition of a well let portfolio within our out-of-town sector. The transaction offers us long and strong income with value-enhancing asset management opportunities and increases our exposure to the leisure sector, which is a growing component of the retail experience. We are pleased to be adding Odeon, one of the sector’s most dominant operators with a 26% market share, to our tenant line up.'

Knight Frank advised LondonMetric and Jones Lang LaSalle advised Odeon Property Group.

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