Investors’ insatiable appetite for fast food properties tested again
Investors’ insatiable appetite for fast food properties will be tested again next month, when one of Australia’s best-performing Hungry Jack’s stores is auctioned off.
Leased to the burger giant on a 10-year net lease with options to 2041, the Hungry Jack’s at Port Kennedy in Western Australia comes to market amid voracious demand for the asset class.
It will be sold at Burgess Rawson’s Investment Portfolio Auction in Melbourne on Wednesday, May 12.
Currently ranked 12th out of the 67 Hungry Jack’s outlets in WA, the thriving Port Kennedy store at the corner of Port Kennedy Drive and Warnbro Sound Avenue has been in operation for 18 years, runs 24 hours a day and includes drive-thru service.
In currently returns annual rent of $200,000 plus GST, with fixed 2% annual rent increases built into the lease.
Burgess Rawson director Raoul Holderhead said the restaurant could not be beaten on location.
“It’s an absolute cracker, with exceptional access and exposure while also adjoining a modern Caltex/Woolworths service station,” Mr Holderhead said.
“Other major retailers including Harvey Norman and Pet Barn are also in the immediate vicinity, while a significant mixed-use development is already in the pipeline directly next door.”
The prime 3435sqm corner site has 14,600 vehicles passing daily, with 41 car spaces also on-title. Leased to Hungry Jack’s head office, the property’s net lease structure sees the tenant pay all the usual outgoings, including land tax.
The auction comes as commercial property buyers race to secure fast food investments, which have been among the best-performing assets nationally throughout the coronavirus pandemic.
A Carl’s Jr burger outlet at Thomastown in Melbourne sold at Burgess Rawson’s March Portfolio Auction for $6.41 million on a sharp 4.62% yield, while Hungry Jack’s outlets in Cairns and Wangaratta were snapped up last year.
Price expectations are between $3.75 million-$3.85 million.
“Investors can’t get enough of them, but they’re so tightly-held and very hard to come by, so this is a real opportunity here,” Mr Holderhead said.
Burgess Rawson’s 144th Investment Portfolio Auction will be held at Melbourne’s Crown Casino from 10.30am AEST on Wednesday, May 12.