Landmark fast food deal in Longford
AN investment property leased to the McDonalds fast food chain in Longford has sold for €1.215m, €100,000 more than expected, after being chased by 14 different commercial bidders.
The sale of the 290sqm outlet at the N4 Axis Retail Park by CBRE which was priced strongly for sale at €1.1m given increasing signs of investor activity represents a net initial yield of 7.09pc.
It also demonstrates the "recession proof" nature of blue chip fast food chain investments where strong covenants are involved and in particular, the attractiveness of McDonalds as indicated by the fact that there were 13 under bidders.
This was also underlined by the fact that retail in Longford has been among the hardest hit nationwide since the downturn and continues to remain flat.
The restaurant comprises a single-storey building constructed in 2001 on a site of 0.105 ha.
The property is laid out to provide a restaurant seating area, kitchen food preparation area and is let to McDonald's Restaurants of Ireland under a 25-year lease from December 2001. The property is subject to a rent of €90,000 per annum with 13 years to run.
Natalie Brennan of CBRE said: "A property like this let to McDonalds in the regions has not come to market for some time so it was difficult to estimate how it might go. But we were confident given the changing climate that it would sell well.
"I think this deal is going to get other landlords of blue chip fast food outlets thinking. McDonalds, Burger King and Supermacs are all on the expansion trail at the moment."