Corio KFC listed for sale with potential to increase revenue
KFC Corio is on the market as City of Greater Geelong seeks to realise the value of non-essential real estate assets.
New owners could unlock a finger licking good recipe to unlock further value in a KFC outlet in Geelong’s northern suburbs.
The longstanding fried chicken restaurant at 200 Princes Highway at Corio has hit the market as the City of Greater Geelong lists a host of ratepayer-owned assets for sale.
Savills agents Stephen Bolton and James Latos have launched the campaign to sell the 1557sq m asset at auction on March 12.
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Price expectations are above $4m for the property, which Mr Bolton said is a very good investment opportunity.
“It’s a proven location, it’s an international name as far as your tenancy goes. And it’s covid proof, it’s got a very defensive profile,” he said.
“It’s got a lot of ticks. The franchisees spent quite a lot of money on the store and I know the council put new airconditioning in a couple of years ago. And you’ve got 48,000 cars going past daily.”
KFC Corio is on the market as City of Greater Geelong seeks to realise the value of non-essential real estate assets.
But there is opportunity for new owners to increase the income from the property over time, from an annual income of $179,025 a year plus GST.
The tenant pays all outgoings except land tax.
The outlet has operated at the site since the early 1980s.
“It’s historically been a low rent there. If you look at market rents, it’s $30,000 to $50,000 below a market rent, but you can’t get to it until 2029 when there’s a market review,” Mr Bolton said.
“There’s a CPI increase in March. I expect that’ll add probably another $5000 to the rent and from there it’ll support itself quite readily.
KFC Corio is on the market as City of Greater Geelong seeks to realise the value of non-essential real estate assets.
“But then in 2029, that’s when you can make a really big clawback and what yield you are buying at now will be far better in three years’ time.”
The freestanding KFC restaurant has both eat-in and outdoor dining, drive-through facilities and on-site parking for 10 vehicles.
There are two five-year options on the lease after 2029.
The restaurant site has been carved out of the neighbouring Stead Park precinct, where redevelopment work has started on a state-level hockey centre, including a new two-storey pavilion.
While this outlet has been listed due to the council looking to realise the value of non-essential assets, the property joins a long line of KFCs, Starbucks, Hungry Jack’s and Guzmen y Gomez outlets that are being traded recently.
While most are in growth areas and being listed by their initial developers, Mr Bolton said people were paying sharp yields because they were a popular investment.
“Most sit under that $5m range that for normal mum and dad investors becomes quite manageable. It’s a great superannuation opportunity,” he said.
