Future of Newport Cineworld Secured with Cut Price Rental Deal

THE future of Newport’s remaining Cineworld cinema looks to have been secured with a cut price rental agreement secured. 
The troubled chain has looked to agree discounted rents with landlords as part of a restructuring plan, put forward by the four firms that make up the UK arm of the world’s second-largest cinema chain to allow them to continue trading. 
As a result it has been agreed cinemas in some of the chain’s 101 locations will be relieved from paying rent while some others will close in line with plans annouced in July. 
Cine-UK Ltd, Cineworld Cinemas Ltd, Cineworld Cinema Properties Ltd and Cineworld Estates Ltd put forward the restructuring plan which they said was demanded by the US arm of the business in return for funding to keep the firms afloat. 
The Newport branch is based at the Newport Leisure Park, also known as Spytty Park, which is owned by Monmouthshire County Council that purchased the site in the neighbouring city council area for £22.5 million in March 2019. 
Details of the rental agreement were provided to a Monmouthshire council scrutiny committee on Monday by Nick Keys the head of its landlord services. 
Mr Keys said the restructuring plan had been approved by the High Court last week. 
The Newport Leisure Park Cineworld is one of around 35 sites in the class B of creditors which it’s considered could be profitable with a reduced rent. 
There are 38 sites in class A, which will continue to operate without any reduction in their rent, with the remaining in class C which will have a “nil rental” so they can remain open to try and turnaround their position while nine in class D will close. 
Rents in some class B sites could be reduced by as much as 87 per cent but Mr Keys said the council is in a “much more favourable position than that”. The final reduced rental figure is under review and Mr Keys described it as “sensitive”. 
He said the restructure will be in place for three years with the reduced rent to be paid from Christmas, three months after the deal was approved.  
His report to the council said Cineworld’s local management has reaffirmed Newport’s “strategic importance” due to its location, limited local competition, free car parking and footfall. 
Labour councillor for Caldicot West End, Jill Bond, said she was concerned the Newport Leisure Park still hadn’t made the two per cent annual return on investment predicted when it was purchased, and questioned the agreement with Cineworld. 
She asked: “Should Monmouthshire residents by subsidising a private company and is this deal fair in relation to other premises or those renting buildings from the council?” 
Mr Keys said the Newport Leisure site is covering the council’s borrowing costs and said the question of “fairness” could be “justified” by the High Court having approved the plan. 
The report to the council stated the leisure park is delivering a net return of 1.41 per cent on the investment. The committee was also told only two of the 11 units on site are currently vacant and talks are ongoing with a potential tenant its anticipated will be trading by Christmas. 
Labour councillor for Overmonnow, Steve Garratt, said he regularly attends Cineworld with his children and said: “We will also go and have a meal, it helps drive other businesses in the area.” 
Cineworld had two locations in Newport but its city centre branch, at Friars Walk, never reopened following the 2020 Covid pandemic.
During the 2023/24 financial year the council’s commercial buildings, including the Newport Leisure Park, generated a combined gross income of £3.628m a figure which is due to improve this year. ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​

By BBC LDRS ‌​‌​‌​​​‍‌​‌​​‌‌‌‍‌​‌‌​​‌​‍‌​‌‌‌​‌‌‍‌​‌‌‌‌​​