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Mount Maunganui prime commercial opportunity on the menu

Tags: Commercial

The land and buildings occupied by fast food franchise KFC Mount Maunganui, have been placed on the market for sale with the offering expected to whet the appetite of the region’s investors.


The pivotal corner site at 145 Newton Street, Mount Maunganui, has three road frontages including a 52-metre profile to Hewletts Road, the major arterial that forms part of State Highway 2.

The standalone property is being marketed by Brendon, Lynn and Ryan Bradley of Bayleys Tauranga and it will be auctioned on Wednesday, April 28, unless sold prior.

“Owned by Tauranga-based private investors since 2014, the property comes to the market at a time when well-located, fully-tenanted commercial opportunities are thin on the ground and hotly-contested,” said Brendon Bradley.

“With a long-term lease in place to multi-national and dual NZX and ASX-listed Restaurant Brands Limited, trading as KFC, this is a classic example of a bottom-drawer passive investment opportunity which will mesh with the expectations of many prudent and well-resourced buyers.”

The 302sqm single-level purpose-built building occupies a freehold 1,670sqm flat parcel of commercially-zoned land, with 27 on-site car parks.

The property includes indoor restaurant area, commercial kitchen, public bathroom amenities, office, chiller room, storeroom, staffroom, outdoor seating area and canopied drive-through capability.

Restaurant Brands New Zealand Limited has a 12-year lease (commencing August 2014) with six, six-year rights of renewal taking the final expiry out to 2062.

The property returns a total net income of $182,250 per annum, plus GST and outgoings.

Bradley said standalone investment opportunities of this calibre have been very thin on the ground in the Mount Maunganui commercial market and he expects robust competition from active investors both within and outside the region.

“It’s ‘game on’ for investors right now in the hunt for an acceptable return-on-investment.

“Given the tight supply of stock at The Mount and a compression of yields being seen right around the country, we’d expect to see a sub-four-percent yield here, which reflects fundamentals at play in the prime investment market.

“The calibre of the tenant, the location, the low interest rate environment and the fact that commercial property has just become an even more-desirable asset class given the compliance thresholds of the residential investment sector, elevates this opportunity in the current market.”

Bradley stresses that KFC is very selective in the sites it chooses to operate from, and the credentials of this property are exceptional.

“The exposure this site has to passing traffic is phenomenal and the property itself is very well presented.

“New Zealanders’ love affair with fast food and fried chicken, particularly, is proven and KFC-occupied property traditionally attracts significant attention from seasoned investors when it comes to the market.

“We are also expecting a new wave of potential investors to the commercial market on the back of recent government announcements which effectively take the heat out of the residential investment sector.”

KFC is the world’s most popular chicken restaurant chain. Its first New Zealand store opened in Auckland in 1971, with its network now encompassing 101 stores nationwide.

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