KFC Mudgee, NSW
KFC Mudgee, NSW. Image supplied
  • Five fast food tenanted sites sold for a combined $16.4 million earlier this week, with record low yields
  • Interest in the fast food assets is historically strong, but Covid has only added to their appeal
  • With more than 100 contract requests for one asset at auction, interest of this kind is "unheard of"

Earlier this week, 40 commercial properties sold under the hammer, over two days in Sydney and Melbourne, for a combined $156 million.

This continues a run of very strong commercial asset auction results, with clearances in the high 80%s or even higher.

Hidden among these sales were some food and beverage assets that were in high demand from investors.

All five fast food tenanted sites – three KFCs, a Subway and a Carl’s Jr – sold for a combined $16.4 million. There was intense interest in these five, with record low yield.

Boasting a record low yield of 2.93%, the KFC asset in NSW’s Forster was the ‘hero sale’ of the day. Prior to the auction the site received over 350 enquires and 109 contract requests and was hotly contested on auction day.

Setting the tone for the Brisbane auction, the KFC site located in Berrinba QLD sold for $5,160,000 (29% above reserve) with a 3.29% yield.

  • Forster NSW – KFC, sold for $2,830,000 on a 2.93% yield
  • Mudgee NSW – KFC, $3,700,000 on 4.98%
  • Berrinba QLD – KFC, $5,160,000 on 3.35%
  • Rockhampton QLD – Carl’s Jr., $3,650,000 on 4.49%
  • Windsor NSW – Subway, $1,045,000 on 4.47%
KFC Forster NSW
KFC Forster NSW. Image supplied

Interest in the fast food assets is historically strong, and Covid has only added to their appeal as a solid investment opportunity.

“Interest in food and beverage assets is always high, the ‘essential service’ nature of convenient retail and fast food has resulted in significant price growth and capital gain across this sector over the past 12 months,” said Dean Venturato, Burgess Rawson NSW agent.

Apparently, receiving over 100 contract requests for one asset at auction is “unheard of”, according to the Burgess Rawson team.

“Overall the Burgess Rawson team received a 50% increase in recorded enquiries for our food and beverage offerings, with the Forster KFC receiving a record 200% increase in enquiries, from both experienced and green investors across Australia and overseas, highlighting the strength and demand for this asset class,” said fellow Burgess Rawson selling agent Rhys Parker.

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