Pandemic-proof asset delivers record-low yield at portfolio auction
A KFC in NSW sold on what’s believed to be a record low yield – 2.89% – and buyers continued to show an interest in childcare assets at the Stonebridge national portfolio auction yesterday.
The KFC restaurant headlined the auction, which attracted 90 bidders in-person in Sydney, as well as online bidders from across Australia.
The fast food outlet at Bomaderry, on a site opposite a Woolworths and sold through the grocery giant’s development arm Fabcot, went for $3.35 million on an impressive 2.89% yield to a Melbourne-based investor.
Stonebridge partner Tom Moreland said the ”super appealing” yield is believed to be a record.
”Despite a rising interest rate environment, private investors remain willing to pay a premium for quality, long-term investment holdings across the ‘safe haven’ sectors of fast food, childcare and convenience retail,” he said.
Mr Moreland said a 16-year lease with Southern Restaurants Group, the country’s biggest KFC operator, and fixed annual rental increases of 3%, made the KFC asset especially attractive.
Low yield is child’s play in Queensland
The enduring appeal of childcare was also evident in the auction, with two Toowoomba childcare assets sold for a combined $9.3 million.
”Story House Childcare at Wilsonton in Toowoomba witnessed the strongest competition, with a sale price of $5,420,000 at a yield of 4.75%, a record low yield for a regional Queensland childcare freehold,” Mr Moreland said.
Story House Childcare at Wilsonton in Toowoomba sold for $5,420,000 at a yield of 4.75%. Picture: realcommercial.com.au/sold
The other childcare asset, also a Story House Childcare, in north Toowoomba, went for nearly $4 million.
”Childcare has long been one of the most sought-after segments among the investment community and the new Federal Government’s signals [that it will continue to support the sector] are further driving the desire for these sorts of assets, which often offer long-term leases.”
While they didn’t sell in the auction, two other Queensland childcare centres, a Play & Learn at The Gap in Brisbane, offering a 20-year net lease to 2039, and Kids ELC in Springwood, are under negotiation, Mr Moreland said.
Bridgestone sold for $4.2m
Away from fast food and childcare assets – which are always high on investors’ wish lists – a tyre and auto asset in Brisbane was also sought-after.
The premium Bridgestone tyre and auto investment in Brisbane’s tightly held logistics precinct of Pinkenba sold for $4,250,000 at a yield of 3.99%.
Located in Brisbane’s tightly held logistics precinct of Pinkenba, Bridgestone tyre and auto sold for $4,250,000. Picture: realcommercial.com.au/sold
A further seven assets in the portfolio auction – including a new childcare centre in the growth corridor at Gregory Hills in Sydney, a Metcash-backed IGA in Melbourne’s Thomastown and a World Gym at Stafford in inner Brisbane – are being offered under expression of interest. They close today.
