Covid-Proof KFC Site Sells For $2.63m

Tumut’s KFC restaurant site has sold for $2.63 million to a private investor in Canberra, riding on increasing investor confidence in ‘Covid-proof’ Regional NSW markets.

The property returned a yield of 4.39 per cent, the “sharpest yield for a KFC sold on-market in regional Australia.”

The sale was part of a commercial real estate auction held by Burgess Rawson on August 4, which was supposed to be held at the Sydney Opera House, but had to pivot to an online bidding app due to ongoing lockdowns.

Burgess Rawson Sales Executive Beau Coulter said investors are looking for businesses which are weathering Covid well.

“The main thing at the moment… is being able to trade through Covid,” he said, describing the Tumut KFC as “Covid-proof, given it’s got drive-thru facilities”.

Burgess Rawson typically holds eight auctions per year, hosted at the Sydney Opera House and Melbourne’s Crown Casino. Mr Coulter said the switch to app and phone bidding did not appear to be dampening interest.

“I don’t think it’s having an effect at all,” he said. “Our data suggests demand is outweighing supply 12:1 for August, which was up from what we thought was high at 6:1 in June.”

Another recent Burgess Rawson auction attracted 300 registered bidders, with a $1 billion combined business pool.

The Tumut KFC listing attracted 252 inquiries, with 15 registered bidders participating on the day.

“Which is incredibly strong,” said Mr Coulter. “We had 252 inquiries in total. The average campaign has 50- odd.” Bidders logged on from Brisbane, Sydney, Canberra, Melbourne and Adelaide.

The Tumut location includes a 145sqm freehold restaurant with a drive thru and a $124,000 tenantfunded upgrade which was completed in 2019.

It sits on a 756 sqm block in the Tumut CBD. Rent at the site was calculated at $115,543 annually, plus GST.

Burgess Rawson also facilitated last year’s sale of Tumut’s Target building, which has now become a Khub.