Buyer pays super-sized price for well-known fast-food restaurant
Thousands of Sydney’s northbound commuters pass it every day on their trip home, hundreds might pop in for a cheeky bite to eat, but not many would be prepared to shell out almost $9 million to own it.
That is, except one Chatswood investor who has paid $8.76 million for the KFC-tenanted building on Pacific Highway, in Artarmon.
The bullish result was just one of many at the final Burgess Rawson Sydney portfolio auction of the year on Tuesday, where large-brand tenanted metropolitan investments attracted strong interest.
Bidding for the property – which has an annual income of $346,521 – opened at $7 million, with buyers throwing in bids of $100,000 then $50,000 then $10,000 before the investor – one of many from the area interested in the property, according to Burgess Rawson’s Simon Staddon – outbid all others.
The site has been a KFC for 48 years, and is located on the northbound side of the busy Pacific Highway.
Mr Staddon said that properties such as this were popular because of their location and long-term prospects.
“Fast-food restaurants are always extremely popular with our investors, they like the fact that they are well located. With this one in particular, in Artarmon, it was a fairly iconic location, it doesn’t really have any competition on the lower north shore. You could wait years for an asset of that quality to come up again,” he said.
Mr Staddon said that investments in metropolitan Sydney were gaining particular traction at the moment, with super-fund buyers driving much of the interest.
“Where the market is poised at the moment it is extremely buoyant, basically buoyed by a lot of super-fund buyers. The market is extremely responsive to metropolitan Sydney investments… What we noticed in this particular auction is a spike in inquiry for good metro assets and we had a number of those here today at the auction,” he said.
Among other highlights was the sale of a Centrelink and Medicare-tenanted building in Wynnum Queensland, one of three Centrelink-tenanted assets sold under hammer on the day.
The near-new building sold for $7.9 million, reflecting a 7.8 per cent yield, and the appetite of buyers for secure, blue-chip assets, according to Burgess Rawson’s Darren Beehag.
“The investment markets like Centrelinks because they’re seen as absolute blue chip – it’s the most secure lease covenant you can get in the marketplace, being the federal government. The buildings that we are selling today are near new buildings and it is expected that the federal government will occupy those buildings for many, many years – thereby offering very good security.”
The Iron Horse Hotel sold for more than $14 million. Photo: Supplied
In regional NSW, a Yass bank occupied by NAB since 1876 sold to a Canberra-based phone bidder for $1.35 million and the Iron Horse Hotel in the Newcastle suburb of Cardiff sold for $14, 800,010.
Full sold results from the day are below:
Income: $346,521 per annum
Sold: $8.76 million
Income: $42,309 per annum
Sold: $736,000
Income: $906,181 per annum
Sold: $14,800,010
Income: $317,609 per annum
Sold: $6.61 million
Income: $26,364 per annum
Sold: $410,000
Income: $74,694 per annum
Sold: $1.6 million
Income: $488,281 per annum
Sold: $5.85 million
Income: $66,809 per annum
Sold: $962,000
Income: $70,703 per annum
Sold: $1,185,000
Income: $343,377 per annum
Sold: $4.8 million
Income: $32,612 per annum
Sold: $550,000
Income: $200,000 per annum
Sold: $3,215,000
Income: $38,329 per annum
Sold: $650,000
Income: $88,121 per annum
Sold: $1,605,000
Income: $621,474 per annum
Sold: $7.9 million
Income: $180,000 per annum
Sold: $3.67 million
Income: $82,000 per annum
Sold: $1.35 million
Income: $98,674 per annum
Sold: $2,210,000
