Tivoli, Cheltenham

Source: CBRE Limited

Tivoli, Cheltenham

The Empire Cinemas chain went into administration last month, providing a rare chance for existing operators to add to their estate, or a platform for new parties to enter the UK exhibition market.

Seven of the chain’s operational cinemas and one closed classic cinema are being made available on an individual or package basis.

“The cinema industry is still in recovery, but we are seeing people flocking back to them with must-see movies such as Barbie and Oppenheimer reminding customers of what they have been missing. As a consequence, the sector is returning to profit and growth, with appealing signs for potential investors,” says Toby Hall, Senior Director at CBRE, the commercial real estate services company appointed to manage the sale.

“It’s an ideal time to buy as we exit the bottom of the cycle with every sign pointing upwards.”

The assets include two Tivoli-branded cinemas in Bath and Cheltenham, which operate successfully as ‘Affordable Luxury’ cinemas. These are premium offers with enhanced food and beverage concessions including a bar, dining facilities and armchair seating. Furthermore, they are operating at the premium end of the market which is already leading the charge on profitability.

The five multiplex sites for sale are all located in strategic locations. The Empire Sutton at the St Nicholas Centre is a long-established multiplex, which was extensively refurbished in February 2018 and offers a state-of-the-art experience.

Likewise, The Empire in the Buttermarket Centre, Ipswich, was opened 12 months prior to this and offers two large Impact Screens as well two “D-Box” Screens with interactive seating.

Both sites offer the latest modern facilities including recliners, premium seating and couches, together with customer lounges and bespoke concession areas.

Three other multiplexes in Birmingham, High Wycombe and Clydebank opened in the 1990s and have fantastic accessibility.

“The Birmingham multiplex features an IMAX and is the dominant cinema in the Southwest Birmingham catchment,” explains Hall. “It is conveniently situated on a leisure park with over 500 car parking spaces. There is no major competition for this cinema other than in Birmingham city centre where parking isn’t free and perhaps not as accessible for those in fringe locations.”

The 10-screen Clydebank Empire is located in a commuter town to the northwest of Glasgow, with a strong residential catchment. Situated adjacent to both Asda and the Clyde Shopping centre, the area is the hub of activity in the town. In addition, the cinema benefits from both multistorey and surface car parking, both of which is free.

The High Wycombe Empire benefits from the affluent local area and is in a great location, in close proximity to the junction of the M40 where its neighbour occupiers include John Lewis, Next, Waitrose and a Hilton Hotel. Immediately adjacent to the cinemas is a new Five guys restaurant, a sublet of the cinema with free parking for over 250 vehicles as part of the site.

“The fantastic upside potential presented by the three standalone multiplexes is that they are being sold with the benefit of a freehold or long leasehold, meaning there is no rent to be paid,” says Hall.

As well as the trading cinemas, there is also the opportunity to acquire the classic Empire cinema at Sutton Coldfield. The venue, which is a stunning 1930 Art Deco design, closed during the pandemic, but is now being made available to a buyer on a freehold basis. The site currently has four screens.

CBRE say that the portfolio of cinemas could provide an ideal platform for an operator looking to enter the market or alternatively could be sold on individual or smaller lot sizes to other existing operators who are keen to build up market share.

The opportunity could not have been timed better for buyers. As the sector starts to see customer admissions recover, the performance of these businesses will continue to improve. The bottom line will benefit further if one considers the chance to build market share.

“Cinema attendances were about 74% of 2019 levels last year and are on track to recover by 2025. It’s a great time to buy a business when it’s not trading at full capacity. These businesses are already profitable, but those profits could be enhanced further.”

Hall is excited by the opportunity to sell and says early interest has been great. “It is rare to be able to acquire operational cinemas and we are experiencing strong demand for these assets from a wide buyer pool.”

For more details: contact Toby.Hall@cbre.com