Investors hot for fast food sites despite yield

Fast-food outlets in Townsville and Rockhampton have sold for skinny yields of about 4 per cent when put to auction in Brisbane by Burgess Rawson.

The recently developed Taco Bell drive-through in Currajong sold to Sydney investors for $4.41m, showing a yield of 3.94 per cent, while a Domino’s drive through in Rockhampton sold for $1.38m, equating to a yield of 4.03 per cent.

Burgess Rawson Joint Head of Agency Queensland Andrew Havig said the properties were among 10 Queensland assets that were sold at the group’s last auction of the year on Thursday.

He said the yields were “pretty sharp”, while returns generally were tightening or holding firm for the right asset.

“Fast-food, medical, childcare and industrial assets are all highly sought after at the moment,” Mr Havig said.

The Taco Bell property was sold with a 10-year lease to Collins Foods to 2029 with options to 2049.

The holding showed an estimated net income of $173,973.

The drive-through restaurant was built in 2019 on a large 2327sqm site in Attlee St and is in a fast-food alley surrounded by other retailers including McDonald’s, Subway, Red Rooster, Zarraffa’s and Pizza Hut.

The Domino’s drive-through at Rockhampton was sold with a nine-lease to 2029, providing rent of $55,658 per annum plus GST.

The 1515sqm site is on a corner location of Bridge St and the Bruce Highway and underwent a full internal refurbishment earlier this year.

In another recent auction deal, a 4800sqm Bohle warehouse leased to BlueScope Steel sold for $11.5m on a yield of 6.25 per cent