Sydney developers flip new Wollongong fast food restaurants
Sydney based Isaac Property Developments, led by brothers Ben and John Isaac, sold new Wollongong fast food investments yesterday as part of a bulk auction event.
In the biggest deal – just – the company reaped $5.75 million, reflecting a 3.5 per cent yield, for the Unanderra McDonald’s at 45-49 Princes Highway, on 2414 square metres at the corner of Second Ave.
With options, the fast-food restaurant can stay until 2021.
Its rental agreement also carries compound three per cent reviews between initial terms.
The buyer was another Sydney based investor.
Isaac also sold the neighbouring Guzman y Gomez-backed restaurant, on 1571 sqm at 52-58 Princes Hwy, for $5.73m – a 4.45pc return.
The Mexican fast-food chain is committed until 2043 when it will be presented with the first of its two 10 year options.
Like with McDonald’s, its lease carries fixed three per cent rent rises.
Both tenants pick up outgoings as part of the rental agreements including building insurance, land tax and rates.
The incoming owners will also be able to claim depreciation benefits for tax (story continues below).
Clearance reflects tepid market
Eleven properties were auctioned yesterday with seven selling – a 63.6pc clearance rate – for a total of just over $31m.
Another Guzman y Gomez, in Nowra, fetched $6.03m – a 4.55pc return.
Two early education investments also traded – Story House Early Learning in north Sydney’s Putney, which collected $5.71 reflecting a 3.51pc yield on its 64th bid, and a Maroubra complex ($1.395m, a 4.6pc return).
A Burgess Rawson spokesperson said the blended yield was 4.29 per cent.
The assets averaged 30 bids.
“Coinciding with today’s RBA decision to keep cash rates on hold for the second consecutive month, bidders demonstrated that the market for blue chip, essential service assets shows no sign of slowing,” they added.
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