The deal, brokered by leading agents Savills Australia & New Zealand, has resulted in the sharpest yield recorded nationally this year for a standalone KFC in Australia, at 2.40%.

The property is located at 91-101 Keilor Road in Essendon and while it features Commercial 1 zoning, allowing for future mixed-use development, the site is securely leased to one of the biggest KFC operators in Australia with total tenure including options through to 2048.

Rick Silberman, Director, Retail Investments at Savills said, “Between the property’s excellent visibility and prominent positioning on Keilor Road, easy accessibility to transport links and a long-term tenancy in place, this property represents an excellent investment in
what is typically a very tightly held retail market.

“At times, we tend to talk about the commercial property market in very broad terms without considering that there are certain sub-sectors within the market that remain as strong as they have ever been, one of which are fast-food freehold investments. The sale of KFC Niddrie is a perfect example of this”, Mr Silberman added.

Stephen Bolton, Director, Retail Investments at Savills said, “Despite the frustration we often see from buyers searching for good retail opportunities, the sale of KFC Niddrie is proof there’s still capital available in the market for quality stock.

“Demand remains strong for well-located assets with secure long-term prospects. This property, which sits directly next to McDonald’s, has a current lease in place until April 2028, with 2 x 10-year options and provides a net income of $167,726 per annum.

The property metrics and fundamentals of KFC Niddrie sits squarely in the ‘sweet spot’ for retail investors that are looking for secure and defensive assets that have proven to be resilient throughout changing conditions in the market,” Mr Bolton concluded.

KFC Niddrie boasts 48m of frontage to busy Keilor Road and features excellent onsite parking with a drive thru facility.