KFC, Hungry Jacks, Red Rooster, etc..

[Trogdor]

Although CIP #3 is a couple of years off yet, as usual, passing the time on realcommercial and the Burgess Rawson monthly auction listing, and thinking of where to go to next.....

There are quite a few KFC's, Hungry Jacks etc.. buildings going up for auction as of late.

Does anybody here own any such or similar investments, and what are the pros and cons.

Pros to me would be pretty stable tenants, long term leases, and cashflows. Australia is only getting fatter!!

Cons would be very limited alternative use and I assume some hard negotiations for capital works at the end of the long leases.

Would this be a fair assumption? Any experiences people can share?

How do lenders view these lends? General 30 - 35% CIP deposits, or a specialised use?

 

[pinkboy]

I have nothing of interest to add!

.....but I just had to comment when someone mentions 3 out of 5 of my food groups as a thread title!


pinkboy

 

[Trogdor]

I have nothing of interest to add!

.....but I just had to comment when someone mentions 3 out of 5 of my food groups as a thread title!


pinkboy

Aren't you a pretty accomplished triathelete pb? Didn't think these were part of the training. Man I do love a double whopper with cheese though.

 

[geoffw]

.....but I just had to comment when someone mentions 3 out of 5 of my food groups as a thread title!

Yes- and those three excluded the best brand of all

I don't know how the others work- I've heard that Maccas own much of their own real estate.

As far as Subway is concerned, it's just another commercial type lease. You get a stable long term tenant- and in return for the safety you are perhaps likely to get smaller returns.

 

[pinkboy]

Aren't you a pretty accomplished triathelete pb? Didn't think these were part of the training. Man I do love a double whopper with cheese though.

I do Triathlons to keep my eating habits in check!

pinkboy

 

[Kinnon Bell]

I have nothing of interest to add!

.....but I just had to comment when someone mentions 3 out of 5 of my food groups as a thread title!


pinkboy

I must ask, what are the other 2?

 

[pinkboy]

I must ask, what are the other 2?

Coffee and Chocolate!

pinkboy.....what else?!

 

[Aaron_C]

I must ask, what are the other 2?

Maccas and O porto?

 

[moyjos]

I must ask, what are the other 2?

NAAAA.... pb Is a qld'er...has to be bundy rum and XXXX.

 

[Kinnon Bell]

Coffee and Chocolate!

pinkboy.....what else?!

Ha, nice. You'd have to do a triathlon a day to keep your those eating habits in check!

 

[pinkboy]

NAAAA.... pb Is a qld'er...has to be bundy rum and XXXX.

Actually I dont drink alcohol! it has been 7+ years since Ive had a drop!

Kesse

Ha, nice. You'd have to do a triathlon a day to keep your those eating habits in check!

You could say that! Todays Triathlon was dig/wheelburrow/spread dirt in the backyard ready for turf! Oh, ran 14k this morning and swam 2k tonight - but they dont count do they?

pinkboy

 

[geoffw]

Can we get back to the topic on hand please?

 

[Trogdor]

Geoff - I've noticed that Subway seems to use more "generic" retail space than the KFC, HJ, KFC, etc which seem to often use the fast food formula - i.e. freestanding with small carpark, etc...

One of our retail CIP's went from a realestate agency to a cafe / restaraunt in a similar vain, I guess I'm asking about the "dedicated" fast food rather than the more generic retail fitted out for fast food, if that makes sense.

 

[geoffw]

Trogdor- that's a fair point, and I don't know the answer. Sorry, I was only responding from my own limited knowledge.

KFC sometimes does use the traditional shop front- and there is the odd Subway housed in what seems better suited for one of the other major players- but that doesn't help your question.

 

[Aaron_C]

Fast Food outlets like Maccas / KFC etc are not considered specialised securities since they can be used for many other retail purposes. I have seen many a former McDonalds converted into a medical clinic, family restaurant etc.

The benefit of these properties is that they are usually large sites on a corner. A fully fitted out McDonalds that contains enough room for a drive-thru and parking would require at least 1 acre (4,000 sqm).

 

[matto_]

where would these opportunities be posted/advertised?

 

[Apollo]

There is Red Rooster in Brooklyn Park, SA that went bust and has been sitting empty for over a year. It is specifically set up for and branded Red Rooster so it has limited appeal to other businesses

 

[Aaron_C]

There is Red Rooster in Brooklyn Park, SA that went bust and has been sitting empty for over a year. It is specifically set up for and branded Red Rooster so it has limited appeal to other businesses

There was one near my parents' house that was a red rooster, went bust, went to a souvlaki hut, went bust, now it's a Nando's.

 

[jrc77]

I think a Red Rooster premises at Blacktown was recently advertised on realcommercial.com.au.

Link here:

http://www.realcommercial.com.au/property-retail-nsw-blacktown-500394595

Looks like it still for sale? Although last time I drove by they had taken the advertising boards down from the front of the premises.

Jason

 

[HiEquity]

Get on a Burgess Rawson mailing list and your inbox will fill up with this sort of thing in "regional growth corridors".

They even send you the yield some of them eventually sell for in their auction campaigns. Gotta say those numbers leave almost as bad a taste in my mouth as the food!

Presumably sending those results out to people can only be for the purpose of attracting vendors - I'm yet to see anything particularly attractive to me on this front but then I guess I'm a yield focussed type of guy. No doubt the developers of this stuff are making a lot of money!