This article is from the Australian Property Journal archive
A PRIVATE investor has set a record low yield at 4.74% for an integrated service stations and fast food restaurants in Queensland.
The brand new 7-Eleven and KFC in Logan Village, which sits around 40km south of Brisbane, is leased by the major groups through to 2036 and 2031 respectively, providing a WALE of 13.4 years and a net income of $450,000 per annum.
Tom Moreland and Michael Collins from Cushman & Wakefield’s national investment sales team managed the $9.5 million in an off-market sale while the asset was still under construction, on behalf of a private developer.
“This sale exemplifies the strong demand for long term leased investments, particularly those with defensive fundamentals and passive cash flows. These assets are among the most highly sought after by investors, especially when the tenant covenant includes leading fuel & convenience retailers and top tier fast food outlets,” said Moreland, associate director at Cushman & Wakefield.
“This, coupled with the property’s strategic growth corridor location and neighbouring a wider precinct that includes a McDonald’s, led the purchaser to pay a record low yield for an asset of this kind in Queensland.”
The site spans 4,013sqm on Waterford Tamborine Road, a major thoroughfare that links Logan to a new maser planned community, Yarrabilba.
The property sits within a larger precinct with offerings due to be completed by 2022, including a new McDonalds’s, childcare centre, medical centre and further retail offerings.
“The tight yield achieved is testament to the scarcity of assets of this nature that become available, particularly in the sub $10m market, which is predominantly led by high net worth private investors,” said Collins, national director and head of investment sales at Cushman & Wakefield.
The KFC and 7-Eleven which occupy the site are both as tenants responsible for all outgoings, with both leases also including annual rent reviews.
Strinzos Property Group and Dacland have put a brand-new 7-Eleven and KFC-anchored retail complex in Melbourne’s west to the market, offering nearly $1 million in annual rent that is expected to grow by more than 50% over 15 years.
“We continue to work with a large number of groups seeking recession and pandemic proof investments, with these groups increasingly willing to pay a premium to secure the assets. 7-Eleven & KFC Logan Village is a perfect example of this, as both tenants continued to trade strongly throughout the Pandemic. We expect this trend to continue, particularly as interest rates remain at an all-time low level,” concluded Collins.
