McDonald’s and KFC sites hit market in fast food property frenzy

A dozen stores run by Australia’s best known and loved fast food restaurants are up for sale in a pre-Christmas rush worth tens of millions of dollars.

A full menu of take away venues from McDonalds, to Hungry Jacks, KFC, Red Rooster and Guzman y Gomez are being served up in an Australia-wide fast food frenzy worth millions.

There’s even a couple of Cheesecake Shops listed for dessert.

But as a dozen stores hosting the nation’s best known eateries hit the market at the same time, with combined sales prices likely to run into the tens of millions of dollars, it’s exposed the shocking spans the world’s fast-food giants expect to be serving cheap eats to Australians for — some featuring leasing options that could have them in place close to next century.

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A trio of McDonalds are likely to be among the most sought after in a pre-Christmas sales rush, with the golden arches in the Earlville Shopping Centre at 517 Mulgrave Rd, Cairns, to be sold as part of a Sydney auction spread on December 9.

It comes with a 20-year lease locked in — and options to extend its stay at the address through to 2084, just 16 years shy of the 22nd century.

There’s a second one up for grabs as part of the Castle Hill Shopping Centre at 264 Dohles Rocks Rd, Murrumba Downs.

And a third is part of the offering at the North Ward Shopping Village at 26-28 Mitchell Street, North Ward.

Their sales follow a brand new Hampton Park McDonalds sold last month in Victoria for $4.717m at more $1.5m above its auction reserve.

The McDonalds at 517 Mulgrave Rd, Cairns (Queensland), is being sold by the Fawkner Property Group.

Another set of the golden arches is part of the sale of the North Ward Shopping Village at 26-28 Mitchell St, North Ward (Queensland).

With the buyer expected to only get a 2.78 per cent return on their money in the deal brokered by JLL, it also had a record-low yield for the fast food chain across Australia.

Meanwhile, Australia’s biggest private KFC operator Southern Restaurants Group are selling two of their Victorian stores at 215 Princes Highway, Beaconsfield, and 123-125 Burwood Highway, Burwood East.

The Victoria-based franchise owner is an employer to thousands of people across more than 100 stores in Victoria, NSW and the ACT.

They’re offering up sites with leases currently worth as much as $334,542 a year in rent, with the Beaconsfield store potentially set to stay in place until as late as 2075 — and with expectations it will make $7m when sold.

Southern Restaurants are selling two KFCs in the next month, including 215 Princes Highway, Beaconsfield, and is expected to top $7m.

The franchise group are also selling 123-125 Burwood Highway, Burwood East.

The Burwood East site is tipped to top $4.5m with the tenant paying for upkeep at the site.

Collins Foods are selling a third KFC in Riverton, Western Australia.

Their listings come as three Hungry Jacks stores are up for grabs around the country, including one at 1-5 Monahans Rd, Cranbourne West, in Melbourne’s outer south east, that’s billed with a chance of selling above $7m.

Others include one that is part of a truck stop being sold at 1730 Murray Valley Highway, Barnawartha North, in northern Victoria; and another at 3 Groves Ave, Mulgrave, in NSW.

a Guzman y Gomez store next door to the Cairns McDonalds is also being sold at 537 Mulgrave Road, Cairns, with a 15-year lease that could extend to 2078.

It’s joined on the market by another in Warrawong, NSW.

Both the Guzman y Gomez and the McDonalds at the Earlville Shopping Centre in Cairns are up for sale.

The GYG on King Street, Warrawong (NSW), is also up for grabs.

Red Rooster stores up for sale include 62-66 High Street, Wodonga, on the NSW and Victorian border, as well as at 1650 Anzac Ave, North Lakes, where the QLD store will go under the hammer on the same day as a Cheesecake Shop next door.

Burgess Rawson from CBRE will put a number of the fast food chain stores under the hammer early next month, with a single operator, the Fawkner Property Group, the seller for three of their sites.

The commercial real estate firm’s Justin Kramersh said investors held McDonalds at the top of their shopping list, followed by KFC and Hungry Jacks, while chains like Guzman y Gomez have carved out a third tier above Red Rooster on the priority menu for cashed up investors.

“We have a lot of investors who have been looking throughout this year and haven’t quite found one, or who are looking for another,” Mr Kramersh said.

“And we might be able to organise a KFC bucket if the price is right.”

Fast food restaurants included at truck stop and petrol stations, like at the 1730 Murray Valley Highway, Barnawartha North, often wind up owned by major funds such as Dexus.

The properties listed with Burgess Rawson from CBRE will be auctioned across three days, starting in NSW on December 9, then Melbourne on the 10th.

“Traditionally, our December auctions portfolio are quite strong,” Mr Kramersh said.

“I think there will be interest nationally and also internationally as well. There’s a lot of Sydney-based investors who are purchasing the Melbourne assets as it’s better bang for buck compared to Sydney where everything is a bit sharper, due to the higher underlying land cost.”

Stonebridge are also auctioning sites this month and next.

Partner Rorey James said the list including Red Roosters, KFCs and a Hungry Jacks would all sell well, with a KFC at Burwood East, east of Melbourne, particularly expected to clear $4.5m

“Traditionally fast food restaurants are on a very good land holding, they are in high-traffic locations and need a drive through which is why they need the land,” Mr James said.

A McDonalds at the Castle Hill Village Shopping Centre at 264 Dohles Rocks Rd, Murrumba Downs (Queensland), is also on the sales block.

The Corner High Rd & Willeri Drive, Riverton (WA), KFC restaurant could soon change hands to a new owner.

He added that it was rare to see larger operations like a KFC hit the market, especially where they had a “ground lease” — where the tenant is required to cover most of the ongoing costs at the site.

“I couldn’t tell you the last time we had one,” Mr James said.

Fast food stores built into truck stops and petrol stations were also often traded between major funds such as Dexus and Charter Hall, with prices north of $20m (for the full site), he added.

Mr James noted that all sites were attracting interest from local investors, as well as local groups backed by money coming out of Asia.

His colleague Kevin Tong said much of the international capital was looking at Australia as a safe harbour to park their money, with many looking for purchases in the $5m-$10m range.

“There’s always been a high demand for Australian fast food stores, as it’s for brands they are familiar with,” Mr Tong said.

While lower down on investors’ shopping lists, there are also a handful of Red Rooster stores up for grabs, including 62-66 High St, Wodonga.

Property investors can even indulge in a sweet treat, with Shop 6 at 41 High St, Wallan, up for grabs, with a lease locked in for the Cheesecake Shop.

Other agencies handling the sales include Colliers, CBRE, Raine and Horne Commercial and Steveway.

Stonebridge director Nic Hage is even selling a Cheesecake Shop to give commercial property buyers a chance at dessert.

“It’s effectively a fast-food-style tenant, but it’s classed as an entry-level investment,” Mr Hage said.

He’s tipped a $1.1m-$1.3m sale price is likely.

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