(Alliance News) - Secure Income REIT PLC on Thursday said it has extended the lease term of four prized assets with Merlin Entertainments Ltd.
The real estate investment trust will part with GBP33.5 million as part of the move which sees Merlin's lease at four assets extended by 35 years. It means the leases now expire 55-and-a-half years from now.
The pact relates to three Merlin UK sites, Alton Towers, Thorpe Park and Warwick Castle, as well as the Heide Park attraction in Germany.
Rental payments are unaltered, though the review process for the three UK sites have been changed.
They will be shifted to the consumer price index plus 0.5%, differing from the previous policy of an uncapped yearly retail price index-linked uplift. The new review policy features a maximum yearly increase of 4% and a floor of 1%.
Over in Germany, the Heide Park amusement park will continue to have a fixed 3.3% annual increase review.
"This is a very meaningful deal for our business, resulting as it does in the weighted average unexpired lease term across the SIR portfolio increasing from 19.2 years to 30.0 years, making our WAULT the longest amongst our peers in the UK REIT sector," Chair Martin Moore said.
To compare, LondonMetric Property PLC has a WAULT of just under 12 years, according to its results for the six months to September 30. British Land Co's stands at six years, meanwhile, while Land Securities Group PLC's is at just under seven years.
Secure Income shares were 1.6% higher at 418.50 pence each in London on Thursday, shortly before midday. It has a market capitalisation of GBP1.36 billion.
By Eric Cunha; ericcunha@alliancenews.com
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British Land (BLND)