A private investor has snapped up a brand new 7-Eleven and KFC at Logan Village, south of Brisbane, for $9,500,000 on a 4.74% yield. The record low yield represents a new benchmark for an integrated service station and fast food restaurant in Queensland.
Sold off-market while under construction, the property features modern improvements and is leased by 7-Eleven to 2036 and KFC to 2031, boasting a WALE of 13.4 years and a net income of $450,500pa. Both tenants are responsible for all outgoings and each lease provides inflation-beating annual rent review structures.
The 4,013 sqm site enjoys a prime location on a major thoroughfare, Waterford Tamborine Road, linking Logan to the new master planned community of Yarrabilba. Strategically positioned as part of a wider precinct, the site neighbours a new McDonald’s restaurant, Childcare Centre, Medical Centre and additional retail – all due to be completed in 2022.
The property was sold by Tom Moreland and Michael Collins of Cushman & Wakefield’s National Investment Sales, on behalf of a private developer.
Cushman & Wakefield Associate Director, Tom Moreland, said: “This sale exemplifies the strong demand for long term leased investments, particularly those with defensive fundamentals and passive cash flows. These assets are among the most highly sought after by investors, especially when the tenant covenant includes leading fuel & convenience retailers and top tier fast food outlets.”
“This, coupled with the property’s strategic growth corridor location and neighbouring a wider precinct that includes a McDonald’s, led the purchaser to pay a record low yield for an asset of this kind in Qld”.
Cushman & Wakefield’s National Director and Head of Investment Sales, Michael Collins, added: “The tight yield achieved is testament to the scarcity of assets of this nature that become available, particularly in the sub $10m market, which is predominantly led by high net worth private investors.”
“We continue to work with a large number of groups seeking recession and pandemic proof investments, with these groups increasingly willing to pay a premium to secure the assets. 7-Eleven & KFC Logan Village is a perfect example of this, as both tenants continued to trade strongly throughout the Pandemic. We expect this trend to continue, particularly as interest rates remain at an all-time low level.”
