McDonald's Australia beats private investors to buy its own Preston fast-food premises

McDonald's Australia has outbid private investors at a packed Burgess Rawson Sydney portfolio auction to acquire its own Preston McDonald's premises.

The 2011-built premises (pictured below) sit on a 2,621 square metre site at the corner of Hoxton Park & Lyn Parade in Liverpool south west of Sydney.

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It sold for $6.45 million reflecting a yield of 5.65% on net income of $365,000 plus GST.

Burgess Rawson director Dean Venturato said the McDonald's property and a Hungry Jack's premises in Minto received the highest number of enquiries ahead of the seven-property portfolio auction, which achieved a 100% clearance rate.

“The McDonald's premises are only two year old and they hardly ever come up for auction,” Venturato says.

“It had a 20 year lease with 18 years remaining on the lease.

“Fast food is considered a very good investment because it's recession proof,” he said.

Searches across commercialview.com.au and realcommercial.com.au show no other McDonald's premises currently listed for sale.

The Hungry Jack's premises on the corner of Pembroke Road and Brookfield Rd in Minto, with a 10 year lease to 2020, sold to a private investor for $2.835 million on a yield of 5%.

The portfolio auction brought in a total of $24.8 million for vendors with the highest yielding sale being a regional distribution facility leased to ASX-listed food company Goodman Fielder, currently being upgraded, which sold to a private investor for $3.37 million on a yield of 8.97%.

Goodman Fielder has a 12 year lease on the property with two six year renewal options.

The average yield across the portfolio auction was 6.45%.

Another noteworthy property was the premises of Aldi supermarket in Minto, which sold for $4.88 million on a 5.64% yield.

The premises are leased to Aldi until 2017 with renewal options to 2032 and brings in net annual income of $277,106 plus GST.

Venturato says Aldi supermarket premises are also rarely available for purchase.

More than 200 people attended the auction with Burgess Rawson fielded 870 enquiries prior to auction with 280 contracts issued.

Venturato described bidding as “spirited” with prices around 30% above reserves for five of the properties.

Apart from the McDonald's sale, all the remaining properties were purchased by private investors, with three as investments in self-managed superannuation funds.

The other sales as part of the portfolio auction were:

• 1st Choice Liquor, Erina - $4.5 million (yield of 7.67%)
• Childcare centre, West Hoxton - $1.63 million (6.35%)
• ANZ Bank, Windsor - $1.176 milion (5.85%)