Passive investors looking to upsize their portfolios will recognise the value that the land and buildings associated with the new Māngere East KFC offers as a bottom-drawer investment opportunity.

Underpinned by a long-term lease to NZX and ASX-listed Restaurant Brands Limited and located at 389 Massey Road, Māngere East, the best-in-class quick service KFC restaurant was purpose-built on land owned by Restaurant Brands and opened late last year.

The site comprises 1,534sqm freehold land zoned Business – Local Centre, along with an additional one-fifth share of 540sqm of land shared with neighbours to the rear, and not used by the tenant.

The 202sqm dine-in and drive-through/takeaway restaurant is well-positioned on the flat rectangular site. It has dual drive-through lanes for efficiency, generous on-grade carparking and good profile to the main thoroughfare Massey Road. It lies within an established residential catchment and is just 250-metres away from Māngere East Village shopping centre and a Woolworths supermarket.

A new 10-year lease to Restaurant Brands Limited will activate upon settlement of the property sale and return annual net income of $205,000 plus GST. The lease has built-in growth via fixed annual increases and five-yearly reviews to market. Further rights of renewal potentially extends occupation for a total of 30 years from the date of settlement.

The property is being marketed by tender closing 15th April through Damien Bullick, Alan Haydock and Geoff Wyatt of Bayleys.

Bullick says the Restaurant Brand’s New Zealand-wide operation has recorded strong transaction growth year-on-year, with KFC leading the way.

“The business attributes KFC sales’ growth to innovative new products and viral marketing, and this recently opened store has modern appeal and is high on functionality.

“KFC Māngere is a prime commercial asset in a growing catchment and should resonate with active investors looking for a robust tenant covenant and long-term growth fundamentals.”

Haydock says the property is a textbook investment offering with all the hallmarks that astute buyers – and lenders – are seeking in the current market.

“Restaurant Brands is strategic around site location and does its demographic homework well. This property is bang up-to-date with the latest branding and has all the bells and whistles for conventional and tech-enabled service delivery.”

Māngere East is undergoing significant intensive residential development via private and government initiatives, and this supports the ongoing viability of quick service restaurants such as KFC, says Wyatt.

“Māngere East is a relatively self-contained suburb with good community facilities, and a range of retail and service options. It has good public transport links and provides easy access to the southwestern motorway.

“The subject property is the newest commercial asset in the neighbourhood and as such, provides a rare opportunity to invest in this growing suburb.”

Restaurant Brands holds New Zealand franchises for KFC, Pizza Hut, Carl's Jr. and Taco Bell. It also owns stores in Australia, California, Hawaii, Guam and Saipan.