Merlin Entertainments has agreed to extend the leases on two of its UK theme parks in exchange for £33 million.
Under the deal today announced by owners Secure Income REIT, Merlin’s leases of Alton Towers and Thorpe Park have been extended to 2077.
The arrangement, which also includes Warwick Castle, will see annual rents increase in-line with the Consumer Price Index (CPI), plus 0.5%.
Under the terms of the deal, annual changes in rental costs will be capped at 4%, with a minimum yearly rise of 1% also applying.
Previously the leases – originally scheduled to end in 2042 – were subjected to uncapped rental rises that tracked the Retail Price Index (RPI).
The CPI and RPI are two ways of measuring inflation, both including and excluding certain types of costs.
The 4% cap based on CPI could see Merlin protected from larger rental increases next year, with the CPI currently running at 4.6% and predicted to rise further next year.
Secure Income REIT is partly-owned by millionaire property investor Nick Leslau.
In a statement today, the company’s chairman Martin Moore said that Merlin Entertainments was a “genuinely world-class” business.
He added: “Through this initiative and particularly the new [environmental and safety] elements incorporated in the agreements, [Merlin has] demonstrated its clear commitment to these unique, landmark sites.”