Melb McDonalds supersized price smashes record at hot auction
The McDonald’s Hampton Park restaurant has sold to an Asian investor for $4.717m at auction.
The owner of a newly-built McDonald’s restaurant in Hampton Park got more than fries on his order, selling the property for about $1m over the reserve and setting a national record for a Maccas-leased outlet.
The store at 59 Hallam Rd sold for $4.717m, setting a sharp 2.78 per cent yield.
JLL’s Dominic McGrath, Romanor Falconer and MingXuan Li auctioned the property on site, drawing a crowd of about 100 people, including 33 registered bidders.
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The property was expected to sell for about $3.2m when it hit the market in August.
Mr McGrath said the result was extraordinary, with the 2.78 per cent yield the sharpest result ever achieved for a McDonald’s freehold investment nationally.
It was just the second McDonalds investment asset offered in Melbourne in a decade.
“We see this result as a clear endorsement of the benefits of an on-site auction, where the sales team and auctioneer can dedicate their full attention to a single asset and client, free from the time pressures and distractions from other competing assets,” Mr McGrath said.
The sale price came in roughly $1 million above the vendor’s reserve when an Asian investor snapped up the property, following strong competition from both local, interstate and offshore parties.
JLL agents Romanor Falconer and Dominic McGrath handled the sale of the McDonalds Hampton Park restaurant.
The property attracted more than 800 inquiries, underscoring the depth of private investor demand for fast-food assets with long leases to blue-chip tenants.
The property is underpinned by a 20-year net lease to McDonald’s Australia Limited, expiring in 2043, with fixed annual rental increases of 2.5 per cent.
The current net passing rent is $131,328 a year, plus GST.
“This is a landmark result for the quick service restaurant (QSR) sector and a clear indication of the confidence investors place in resilient retail investments,” Mr McGrath said.
“Assets leased to McDonald’s are among the most tightly-held asset classes in the country, and we anticipate this result will further drive appetite across the broader fast-food sector.”
Commercial real estate leased to fast food competitors such as KFC, Guzman Y Gomez, El Jannah and Hungry Jack’s has been on the menu across Australia, but none setting the sort of yield as the Hampton Park McDonalds.
McDonald’s Hampton Park was the first investment from the fast-food giant offered to market in Melbourne in a decade.
Mr Falconer said the strong competition demonstrated the enduring appeal for long leased fast-food investments located in strategic growth corridor locations.
“The level of inquiry and bidding we saw is testament not only to the strength of the McDonald’s covenant but also to a positive shift in market dynamics, with Australia’s sustained declining debt environment driving an influx of new and repeat investors looking to deploy capital in the latter part of 2025,” he said.
“Fast-food tenanted investments offer bond-like security with low-risk profiles, attributed to their long-term leases to globally recognised brands, fixed rental increases, minimal management requirements, and prime high exposure locations, all factors which fuel investor competition.”
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