Multimillion-dollar, NZX-listed company Restaurant Brands is the vendor and tenant in the sale and leaseback of the KFC restaurant in the South Island’s Oamaru.
Restaurant Brands is the New Zealand operator of a number of significant international food brands including KFC, Carl’s Jr, Starbucks and Pizza Hut, says Charlie Oscroft
of Colliers International who, with colleague Dean Collins
, is marketing the property.
“Restaurant Brands is a huge publicly-listed company - with sales totalling $387.6million in the 2015/16 financial year - that is in a massive growth phase following the acquisition of the KFC business in Australia last month; a well-established and profitable operator with 42 stores and sales in excess of $A100million,” Oscroft says.
“Among Restaurant Brands’ stable are some of the world’s most famous food brands, distinguished not only for their product but also the look and ambience of their outlets, their service and the total experience they deliver to their customers in New Zealand and around the world.”
The KFC restaurant on offer sits on a freehold 1,212 sqm site at 271 Thames St, Oamaru and is being marketed for sale by auction at 11am, Thursday 12 May at Colliers’ auction rooms in Dunedin, unless sold prior.
“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 commenced 1 April 2016, with further rights of renewal, giving investors a total potential lease term extending 48 years to March 2064. Rent reviews are every three years. The main rental area comprises 210.24 sqm, with a storage area of 31.73sqm and an outdoor seating area of 13.57 sqm.
KFC is a global food chain that hit our shores in 1971, with the first store opening in Auckland and the brand expanding since to over 98 stores nationwide, Oscroft says.
“The opportunity to obtain the Oamaru restaurant is an exceptional one where investors can secure the chance to 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.”
Collins says the restaurant is situated on the corner of Thames St and Usk St, which forms part of State Highway One heading north and south 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 in close proximity 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 (F&B) offerings in the region, particularly for such well-known, established and well-liked brands such as KFC.
“A property like this very rarely comes up for sale in Oamaru and we anticipate it to be highly sought after.”