Rare GYG-anchored Sydney fast-food freeholds hit market
Brand-new drive-through freehold investments are among Sydney’s scarcest commercial property assets. Now, four have hit the market at once, headlined by two rare 20-year leases to ASX-listed Guzman y Gomez, offering investors long-term income backed by Australia’s best-known fast-food brands.
The offerings are led by a newly completed Guzman y Gomez restaurant at 182 Pennant Hills Road, Thornleigh, on Sydney’s leafy upper north shore, which Stonebridge Property Group is marketing on behalf of national developer Griffith Group.
Stonebridge partner Tom Moreland says opportunities to acquire brand-new fast-food investments in metropolitan Sydney are increasingly difficult to find.
“Fast food investment opportunities in metro Sydney are incredibly scarce, let alone brand-new offerings in established and thriving retail corridors such as this,” he says.
“High underlying land values, alongside construction cost challenges, underpin the performance of established outlets and GYG’s commitment to this site for the next 20-plus years is testament to their confidence in the location.”
Stonebridge is also marketing three separately offered drive-through investments at a new fast-food precinct in Western Sydney’s Cranebrook, a growing residential suburb about two kilometres north of Penrith, occupied by El Jannah, Guzman y Gomez and Hungry Jack’s.
All four free-standing fast-food assets were completed in June and are positioned in established high-traffic retail locations or expanding growth corridors. The portfolio spans two distinct Sydney catchments, from Thornleigh, where residents aged 40 to 59 represent the largest age cohort, to Cranebrook, where 20 to 29-year-olds make up the largest age cohort, according to Domain Insight.
The Cranebrook trio is located seven minutes from Westfield Penrith, one of Western Sydney’s largest retail centres, and about 16 kilometres from the soon-to-open Western Sydney International Airport.
Across all four investments, buyers are offered fixed annual rent increases of 3 per cent, net lease structures requiring tenants to pay all property outgoings including land tax, and the depreciation benefits associated with brand-new construction.
The listings come as Guzman y Gomez abandons the United States to refocus on its long-term ambition of growing its Australian network to 1000 restaurants.
Investors welcomed the May announcement, viewing the US business as a distraction from the company’s stronger-performing domestic operations, with GYG shares rising by up to 20 per cent following the news.
Thornleigh flagship asset
The Thornleigh restaurant, about 30 kilometres north-west of the Sydney CBD, generates net annual income of $650,000 and is secured by a lease to 2046, with three further 10-year options extending the potential tenure through to 2076.
Occupying a prominent 2682-square-metre site, the Thornleigh development comprises a 271-square-metre purpose-built drive-through restaurant, a dual-lane drive-through, a 45-metre slip lane for direct access, 30 customer car parks and dedicated parking for delivery riders.
The restaurant serves an untapped Hornsby Shire catchment for GYG of more than 155,000 residents and is exposed to more than 33,000 vehicles daily. It also sits within an established fast-food precinct anchored by one of Australia’s highest-grossing McDonald’s restaurants, highlighting the strength of the surrounding trade catchment.
Western Sydney growth corridor
Meanwhile, the three Cranebrook properties, positioned about 60 kilometres north-west of the CBD, form part of a newly developed mixed-use precinct incorporating a service station, childcare centre and gym, with KFC occupying a neighbouring site.
The precinct services more than 32,000 residents across Cranebrook, the rural locality of Castlereagh and the master-planned community of Jordan Springs, with the surrounding population forecast to grow by more than 28 per cent by 2041.
It also stands to benefit from the imminent opening of Western Sydney International Airport, with freight services commencing this month and passenger flights from October, alongside the Aerotropolis and future Sydney Metro Airport connection. Together, the projects are expected to transform the Western Parkland City into one of Australia’s largest employment hubs, supporting around 200,000 jobs.
The trio of purpose-built drive-through restaurants comprises the El Jannah investment at 1/1 Renshaw Street, the Guzman y Gomez at 3/1 Renshaw Street and the Hungry Jack’s at 4/1 Renshaw Street.
The El Jannah property occupies a 3241-square-metre site with a 283-square-metre restaurant, while the Guzman y Gomez sits on a 1671-square-metre site with a 257-square-metre building, and the Hungry Jack’s occupies a 1780-square-metre site with a 295-square-metre restaurant. Each features a dual-lane drive-through.
The Guzman y Gomez and Hungry Jack’s properties each generate net annual income of $325,000, while El Jannah returns $275,000.
The Cranebrook Guzman y Gomez investment is also secured by a 20-year lease to 2046, matching the Thornleigh offering, while El Jannah and Hungry Jack’s each hold initial 10-year leases to 2036, with options to 2056.
Stonebridge executive Aike Sakeson says: “Brand new fast-food freeholds in Sydney are exceptionally rare and secure prospective investors with maximum depreciation benefits from day one. With land tax paid by the tenant, landlords carry none of the risk that comes with each asset’s strong underlying land value.”
The Cranebrook investments will be offered individually through Stonebridge’s national portfolio auction at 11am on Wednesday, July 29.
The Thornleigh property is being sold separately through an expressions-of-interest campaign closing at 3pm on Thursday, July 30.
