Success Through Legacy: The Power of Time, Trust & Truth
- News
- Automotive
- Childcare & Social Infrastructure
- Fast Food
- Fuel & Convenience
- Large Format Retail
- Medical, Pharmacy & Health
29/07/2024
Unlocking the benefits of investing in trusted iconic brands promises more than just long-term stability, robust growth, and secure occupancy rates – it’s a strategic choice that aligns your investment with market resilience and consumer trust.
These iconic brands have carved their place in history and culture, ingraining themselves in the daily lives of millions worldwide.
The McDonald’s golden arches symbolise convenience and familiarity, while Starbucks’ ubiquitous presence serves as a gathering place for coffee enthusiasts. These brands evoke a sense of nostalgia and reliability, representing cultural landmarks that resonate deeply with customers.
Consumers cherish these brands for their consistency, quality, and innovation. McDonald’s, for example, has not only revolutionised the fast food industry but has also become synonymous with affordable indulgence and family-friendly dining. Starbucks’ commitment to quality coffee and cozy ambiance has transformed coffee culture globally, creating a community around its products. Similarly, Hungry Jack’s, with its flame-grilled burgers, has become an Australian staple, known for satisfying hearty appetites with its distinctive taste.
The prominence of these leading conglomerates lies in their ability to adapt and thrive in ever changing markets. Continual innovation, whether through menu updates, product upgrades, sustainable practices, or digital integration, keeps these brands ahead of consumer trends and preferences.
This adaptability ensures their enduring relevance and consumer appeal, making them stalwarts in the commercial property landscape.
Established brands like McDonald’s, Starbucks, Hungry Jack’s, 7-Eleven, Petbarn, and TerryWhite Chemmart not only provide secure financial benefits but also enhance the perceived quality and trustworthiness of the assets they occupy. The reputation and prestige of these tenant brands elevate property values and market positioning, influencing community perception and tenant loyalty.
An example of this success is demonstrated by our recent sale of McDonald’s in North Rothbury which made waves with an exceptional outcome—drawing 37 registered bidders who fiercely competed with 36 bids at auction, ultimately securing the property at a sharp yield of just 2.97%.
Investing in well-known brands operating sectors like childcare, convenience retail, and large format retailing are also lucrative when it comes to property.
Prominent players in early education have gained the trust of parents and boast strong occupancy rates translating into strong investment demand. Another standout result includes the $7.78 million transaction of the Killara, NSW, boasting a sharp yield of 4.14% – the lowest recorded for a childcare asset this year.
Leading convenience retailer 7-Eleven consistently outperforms with a yield averaging 5.82% over the past year, compared to an
overall average return of 6.72% for lesser-known operators. Since its inception in Oakleigh, Victoria, in the 1970s, 7-Eleven has grown to 750 outlets across Australia, becoming one of the nation’s most recognised brands.
Supercheap Auto, with its vast range of automotive products, has created a loyal customer base and boasts a 25% market share in the Australian auto parts retail sector. Bridgestone, equally loved and trusted, has established itself as a leader in tire manufacturing and automotive services, consistently ranking as the top tire brand in customer satisfaction surveys.
Established businesses demonstrate long-term commitment and inject significant capital into property upgrades, enhancing investments with customer loyalty and market presence.
Securing properties leased to these trusted entities provides stability, growth, and long- term value, anchoring investments with their enduring presence and proven growth trajectory.
Strategically located in high-traffic areas like major highways, shopping centres, and tourist spots, properties leased to reputable brands benefit from meticulous research and due diligence by the brands’ research teams, ensuring maximum exposure and accessibility, thus enhancing property desirability.
From a financing perspective, properties leased to established brands are viewed as lower-risk investments by lenders, offering more favorable terms such as higher loan-to-value ratios and lower interest rates.
Such properties enjoy higher visibility and attractiveness to potential tenants and buyers. The brand’s strong customer base and marketing reach facilitate easier leasing and potentially higher resale values, providing investors with greater flexibility and liquidity.
By making these iconic brand’ legacy part of yours, you align your investment with the strength and reliability of brands that have stood the test of time, securing your portfolio with assets that promise stability, growth, and long- term value.
Trusted Brands
McDonald’s – With over 1,000 stores nationwide, McDonald’s commands a formidable 23.2% share of fast food revenue in Australia. Recently announcing a $1 billion investment, it marks the company’s largest expansion effort since the 1990s.
Hungry Jack’s – This Australian favourite reported an incredible $2 billion in sales for 2023, marking a robust 12.6% annual growth. With 450 outlets currently and plans to open 700 more, Hungry Jack’s continues to solidify its presence in the fast food market.
7-Eleven – From its humble beginnings in suburban Melbourne, 7-Eleven has expanded to over 750 stores across Victoria, New South Wales, ACT, Queensland, and Western Australia. Processing a staggering 250 million transactions annually, 7-Eleven recorded a 5.5% revenue increase, totalling $5.32 billion in 2023.
Supercheap Auto – Founded in 1972, Supercheap Auto began as a mail-order business for automotive accessories, quickly expanding to open its first retail location in Brisbane, QLD. Now part of the Super Retail Group and operating in approximately 700 locations across Australia and New Zealand, Supercheap Auto remains a leader in the automotive retail sector.
Petbarn – Under the ownership of Greencross, Petbarn has grown to over 180 stores nationwide, achieving annual revenues exceeding $500 million. Known for its comprehensive pet care offerings, Petbarn continues to be a trusted name among Australian pet owners.
TerryWhite Chemmart – Supported by the EBOS Group, a global leader in healthcare, TerryWhite Chemmart boasts a legacy of over 60 years in the pharmacy industry. With more than 550 pharmacies nationwide, TerryWhite Chemmart is renowned for its commitment to community health and pharmaceutical excellence.
Affinity Education – Established more than a decade ago, Affinity has more than 225 childcare centres across Australia and generated revenues of $552.8 million and profit before tax of $23.7 million in 2023, increases of 35 per cent and 20 per cent compared to the prior year respectively.
Resale Case Studies
Hungry Jack’s – Wangaratta VIC
Originally purchased for $910,000 at a yield of 5.64%, subsequent transactions in June 2020 and December 2022 highlighted its strong growth.
Sale prices soared to $2,005,000 (a 120% increase from its purchase price) and $3,160,000, respectively, marking a remarkable 247.25% surge in value over a decade.
7-Eleven – Nambour QLD
Initially sold for $3,851,000 in February 2020 with a yield of 6.20%, this high-profile asset subsequently resold for $4,825,000 in March 2022, marking a significant 25.29% increase in value in just two years.
This growth underscores the property’s appeal in the Nambour market, highlighting its potential for solid returns and capital appreciation.
KFC – Wellington NSW
This premium property has shown substantial appreciation in value over a span of approximately six years.
Initially purchased for $1,605,000 in December 2016, with a yield of 5.49%, the property was subsequently sold for $2,600,000 by March 2022, marking a significant 61.99% increase in value.