A freestanding KFC situated at a prime corner location of metropolitan Melbourne has been brought to market with Savills Australia and New Zealand being exclusively appointed to sell the QSR. This rare retail investment offering features a high-quality, freestanding drive-thru KFC that has been recently refurbished and remodelled.
Situated on a substantial 2,790 square metre commercial 2-zoned landholding at 2-16 Piper Drive, Chelsea Heights, this KFC is being offered with a new 15-year lease to Southern Restaurants, the largest privately-owned KFC franchisee in Australia. Established in 1991, Southern Restaurants operates 95 stores nationwide and employs more than 7,000 people.
This impressive 15-year lease term, along with three additional 10-year options, will appeal to a wide range of investors, providing the stability of a well-established and trusted tenant. This long-term lease underscores the tenant’s commitment to the location, making KFC Chelsea Heights an ideal “set and forget” blue-chip investment.
Adding to the investment appeal, the property has recently undergone a capital-intensive refurbishment that includes new air conditioning units, signage and murals, premium cladding, windows, paint, internal wall linings, counters, furniture and kiosk stations.
KFC Chelsea Heights has enjoyed longstanding tenure in this location since 1992, and its success over the past three decades highlights the strategic nature of its location. The property benefits from a prime co-location directly adjacent to a McDonald’s, forming part of a dedicated fast-food precinct that has become a popular destination for both locals and the strong passing trade of this major intersection.
The synergy between these two major brands enhances the precinct’s appeal, driving significant foot and vehicular traffic and contributing to the ongoing success of the businesses located there.
Rick Silberman, Director, Retail Investments at Savills Australia and New Zealand says, “The combination of a tenant of this calibre and a rarely offered 15-year term makes KFC Chelsea Heights a unique investment opportunity. We anticipate strong demand from private investors, syndicators, and funds alike. The stability and long-term growth potential offered by this asset are difficult to find in today’s market.”
Further enhancing this opportunity are the attractive annual rental increases of 3.00%, which guarantees strong rental growth, ensuring the asset will continue to generate consistent returns, making it particularly appealing in a market where such opportunities are increasingly rare. Stephen Bolton, Director, Retail Investments at Savills Australia and New Zealand, further emphasised the strategic value of the property, adding, “KFC Chelsea Heights benefits from its prime positioning at the corner of two major arterials of Edithvale/Springvale Roads and Wells/Boundary Roads.
“These roads see a combined traffic flow of over 55,000 vehicles daily, providing excellent visibility and easy access for the drive-thru facility. Such a high-traffic location is a significant advantage, ensuring sustained customer flow and long-term viability.”
Savills is expecting interest from investors at an approximate 5.00% return on the current passing net income. KFC Chelsea Heights is being offered for sale by public Expressions of Interest, closing 3:00pm (AEDT), Wednesday 9th October 2024.
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