In one of the most unusual investment sales this year, two drive-through restaurants are to be offered for sale beside Charlestown Shopping Centre in Dublin 11.
Joint agents CBRE and Bannon are seeking €3,950,000 for the newly-constructed food outlets which will give investors an initial return of 7 per cent.
The restaurants, rented by McDonald’s and KFC, are well positioned directly adjacent to a new 13,935sq m (150,000sq ft) nine-screen Odeon Cinema and Leisureplex which are scheduled to open next Spring.
The complex is being developed by brothers Mick and Tom Bailey of Bovale Developments whose loans have been transferred to Nama.
The State agency is understood to have provided funding for the restaurants and entertainment centre which are located at the junction of the N2 Ashbourne Road and the M50.
Dunnes Stores are the anchor tenant in Charlestown Shopping Centre, which first opened for business in 2007 and adjoins a substantial apartment development also completed by Bovale.
Annual rent
The restaurants are occupied under new modern long-term leases from 2012 and produce a combined rent roll of €291,400 per annum.The weighted average unexpired lease term runs to over 16 years.
McDonald’s pays an annual rent of €150,000 under a 25-year lease and is allowed to trade on a 24-hour basis.
The group reported an overall turnover of €77 million last year with a profit of €11 million from its 81 fast food restaurants.
MBCC Foods, trading as KFC, also signed a 25-year lease but has a break option in year ten. It pays a rent of €141,400 per annum.
In addition to KFC, the company operates Pizza Hut and Costa Coffee in Ireland, and recorded a 53 per cent increase in profits last year.
CBRE and Bannon say they expect considerable interest in what is a “dry asset” because of the strength of the covenants and the excellent income return.
Retail investment
Latest figures suggest that of almost €970 million spent on the purchase of investment properties in 37 deals this year, only 8.7 per cent of the funds have gone on retail investments.
“While there is a strong sentiment from investors seeking high quality retail investment assets the spend figures to date substantiates the lack of good quality retail investment product to come to the market,” say CBRE and Bannon.
