First Sydney McDonalds site for sale in 5 years, First KFC Ground lease site in 7! Predictions?

Discussion in 'Commercial Property' started by Chabs, 22nd Jul, 2018.

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  1. Chabs

    Chabs Well-Known Member

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    Burgess Rawson are notorious for extracting the highest possible sale prices in their Auctions.. and they have a pretty easy set up now with the 4 sites in this one..

    Article: Fast food assets in high demand

    There's four sites, perhaps the most interesting is the over 2000m2 site leased to a thai restaurant which is netting less than $100k. It borders Bunnings and probably has scope for improvement..

    Thoughts & predictions on sale prices? My guess is a 3.8% yield on the Macca's site and no idea how to gauge sale value on a ground lease site (the KFC).. Maybe @Beano can lend some advice?
     
    Chabs, 22nd Jul, 2018
    #1
  2. Scott No Mates

    Scott No Mates Well-Known Member

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    There's on magic, it's NPV of cashflow.
     
    Scott No Mates, 22nd Jul, 2018
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  3. Harry30

    Harry30 Well-Known Member

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    I see the MacDonalds lease runs out in ~3.5 years. That alone suggests an investment which is high risk. Be interested to know what the fit out/transition costs for a MacDonalds would be if they shifted sites? If this is a manageable cost, then all negotiating strength is with MacDonalds as the lease come up for renewal. Interested in what other people think.
     
    Harry30, 22nd Jul, 2018
    #3
  4. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    McDonalds was always supposed to be fast food. It's certainly not fast any more. Gone are the days when you could walk in there, ask for a cheeseburger and you could place your order, pay your money and be given your food all within one minute - a service level they were proud of. These days, it hurts my eyes watching the staff trip over each other trying to function in their reduced service area designed for making the food "fresh". "Fresh"? "Food"? It's definitely not fast any more, so the reasons for going to McDonalds are dwindling. It will be interesting to see if this burger business can survive with this new business model. Not just specific to this site that is for sale, but all of them. I can certainly see how a McDonalds tenancy wouldn't necessarily give the landowner confidence any more.
     
    JacM, 23rd Jul, 2018
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  5. Beano

    Beano Well-Known Member

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    Yes the Thai restaurant could have the best growth in rental
    Need to read the leases but it seems with this type of takeaways you are pretty well just owning and leasing the land
    These specialised buildings may need a lot of modifications to suit other users and may not add much value to the land.
    IF you can crank up the rental on the Thai restaurant even a purchase on a 3.8pc yield may end up a gpod buy
     
    Beano, 23rd Jul, 2018
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  6. Chabs

    Chabs Well-Known Member

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    Well that wasn't exciting..

    All four properties went in a pre-auction confidential sale. Presumably they went to the same buyer, I'm assuming its been earmarked for a development site in about 10-15 years?
     
    Chabs, 2nd Aug, 2018
    #6