Fast food assets heating up

Friday 8 June 2018

Investor interest in fast food assets is heating up as demand outstrips supply.

HOT FOOD MARKET: The sale of Domino's Pizza Figtree is an example of the growing interest in investment in fast food assets in the Illawarra.

HOT FOOD MARKET: The sale of Domino’s Pizza Figtree is an example of the growing interest in investment in fast food assets in the Illawarra.

Burgess Rawson is one agency that has firmly set its sights on investors interested in such property in the Illawarra.

It follows a Fast Food Property Investment Report done by the property agency recently showing fast food sales yields have compressed from a median 6.95 per cent in 2012 to 4.92 per cent in 2017/18 in metro and regional areas.

Burgess Rawson said the recent sale of Domino’s Pizza Figtree for $1.2 million on a compressed yield of 5.32 per cent, was a sign that investors are looking at areas such as Wollongong to invest.

Director Simon Staddon said such assets were highly-sought afer and had a low risk profile.

He expects them to continue to grow in popularity.

“Demand continues to increase for these tightly held set and forget assets, with many landlords holding multiple properties.

Investors are prepared to pay a premium to de-risk their property portfolios.

They also offer long-term indexed income streams, underpinned by strong land values.

While many think investors are only attracted to these assets in major cities, regional fast food outlets are some of the best performing.”

Investor interest in the fast food sector is also driven by its ability to embrace digital technology.

“Early adopters who harnessed the potential of Uber Eats have witnessed a significant increase in sales and customer reach,” Mr Staddon said.

View the original article here.

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Written by Greg Ellis, Illawarra Mercury


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