A secret recipe for commercial success
The Oamaru KFC site has a strong tenant, long lease and good location.
Restaurant Brands is vendor and tenant in the sale and leaseback of the KFC restaurant in Oamaru.
The restaurant on offer sits on a freehold 1212sq m site at 271 Thames St, Oamaru, and is being marketed for sale by auction on Thursday, May 12, at Colliers’ auction rooms in Dunedin unless it is sold by negotiation.
Restaurant Brands is the New Zealand operator of international brands including KFC, Carl’s Jr, Starbucks and Pizza Hut, says Charlie Oscroft of Colliers International who is marketing the property with colleague Dean Collins.
“The strength of Restaurant Brands’ tenancy is a considerable plus for prospective buyers, who may be local investors or perhaps high net worth individuals or family trusts from further afield — such as Auckland — seeking a strong, established bottom-drawer investment opportunity where they can sit back and collect the rent,” Oscroft says.
The property generates net annual rental of $116,135 plus GST on a 12-year lease which started April 1, with further rights of renewal, giving investors a total potential lease term extending 48 years to March 2064.
Rent reviews are every three years and the main rental area comprises 210.24sq m, with a storage area of 31.73sq m and an outdoor seating area of 13.57sq m.
Restaurant Brands, which is NZX-listed, had sales totalling $387.6 million in the 2015-16 financial year and is in a massive growth phase following the acquisition of the KFC business in Australia last month. “It is a well-established and profitable operator with 42 stores and sales in excess of A$100 million,” Oscroft says.
“The opportunity to obtain the Oamaru restaurant is an exceptional one where investors can secure the chance to gain a premium quality asset — in a popular asset class — with an established and successful tenant on an exceptionally long-term lease, which is further strengthened by a high-profile corner location on a state highway.
“All the fundamentals combine to render this a top tier passive investment opportunity.”
The restaurant is on the corner of Thames and Usk Streets, which forms part of State Highway 1 in Oamaru.
“The site has two street frontages, which offers very impressive exposure for such an iconic brand as KFC, and Thames St is the main arterial road in Oamaru as it feeds traffic heading in and out of Oamaru.
“The site is also close to a number of key retailers and national and international brands in Oamaru, including Caltex, The Warehouse, Repco, Paper Plus, Countdown, Farmers and Noel Leeming.”
Oamaru is the largest town in North Otago, the main town in the Waitaki District and the second largest town in Otago behind Dunedin, Collins says.
“Oamaru has a buoyant local economy — underpinned by both agriculture and tourism. This translates into consistent and proven demand for food and beverage offerings in the region.
“A property like this rarely comes up for sale in Oamaru and we anticipate it to be highly sought-after.”