This article is from the Australian Property Journal archive
AN old car yard in Brisbane’s outer south that is being developed into a 7-Eleven, KFC and Starbucks has been snapped up by a Queensland-based private investment group off-market for circa $15 million.
The 4,578 sqm property at 2433 Logan Road in Eight Mile Plains is nearing completion and consists of a 203 sqm service station and retail space, consisting of a 225 sqm KFC and a 149 sqm Starbucks outlet.
7-Eleven, KFC and Starbucks’ leases average 10 years.
Jason March and Christian Sandstrom of Knight Frank managed the sale for Eight Mile Property Group.
“The deal is significant in the yield achieved, which was sub 5%, in this price bracket, all achieved off-market,” March said.
“It clearly demonstrates there is still a strong appetite for retail convenience investments, even in higher price brackets, where there is a smaller buyer pool.”
A Shell service station in Melbourne’s inner west sold at last week’s Burgess Rawson portfolio auction for $10.9 million, with the sale price reflecting a 5.72% yield.
March said one of the major drawcards of the asset was that it was fully leased to national tenants, guaranteeing income for around the next decade at least.
“The market is still strong, driven by the lack of quality stock in the marketplace and high demand from investors.”
Sandstrom said that whilst there have been question marks over the future of service centres with the gradual uptake of electric vehicles, demand remained strong for quality assets.
“The amount of capital flow seeking long-lease assets with secure income anchored by national and international companies is at its highest levels since COVID 19, with record yields being paid for this asset class,” he said.
“Developers are now designing these service centres with complementary retail and business services that provide alternate revenue streams which will ‘future proof’ their income potential and re-adaptive use.”
KFC tenancies also proved to be a sought after covenant last week. At both of the Sydney and Melbourne editions of the Burgess Rawson portfolio auction events last week, KFC outlets in Berrinba – further south from Eight Mile Plains – and in Forster achieved yields of 3.35% and 2.93% respectively.
Sandstrom said the Eight Mile Plains property is on a main arterial and is highly visible to passing traffic. He added that the suburb has been identified as a key economic growth area for Brisbane, with council creating the Eight Mile Plains Gateway Neighbourhood Plan to identify opportunities for investment in greater infrastructure, industry and development.