Agents say location, appearance of the building, strength of the tenant and long term tenancy are criteria that discerning investors and their financers both demand and expect of an asset – particularly in a market with lingering headwinds.

Since 2001, the contemporary building at 237 Commerce Street, Kaitaia has been leased to Restaurant Brands Properties Limited, trading as KFC, with the guarantor being Restaurant Brands Limited, the NZX-listed–entity which also has Carls Jnr., Taco Bell, and Pizza Hut in its ownership stable.

The KFC Kaitaia lease had an initial term of 12 years and three months, with a further six, six-year rights of renewal – two of which have been exercised, meaning the lease has a final expiry of 31st January 2050.

The property returns annual income of $87,925 plus GST and outgoings, with the lease structured for three-yearly market rent reviews.

Zoned Commercial, the 202sqm building occupies a flat, landscaped 1,404sqm site with significant frontage to Commerce Street – Kaitaia’s main thoroughfare.

The single-level building has recently had tenant funded refurbishment works completed and offers a counter service and generous dine-in seated area, public bathroom amenities, food preparation and cooking area, food storage and staff amenities and has drive-through facilities with a large, off-street sealed carpark.

The freehold land and purpose-built premises associated with KFC Kaitaia are for sale by deadline private treaty closing 4pm Thursday 21st September, unless sold prior, through Lia Pauley and Dickie Burman, Bayleys in the North, and Mike Houlker, Bayleys Auckland Central.

The vendor, a long-time client of Bayleys, has owned the property for over 20 years, saying it has proved to be “a very good hands-off investment”.

Houlker says with the vendor’s advancing years, it is time to divest the property, creating a unique opportunity for a new owner to benefit from the strong tenant credentials and long term tenancy.

“This is a textbook example of an affordable bottom-drawer commercial investment that can quietly tick away.

“The opportunity is further layered with the peace-of-mind that comes from a listed entity tenant demonstrating long-term commitment to the site, coupled with the fact that well-entrenched fast-food chains are seen to be recession-proof which underpins the covenant.

“With Bayleys having brokered a number of sales of KFC-occupied properties throughout the country in recent years with investors actively competing for ownership, we’re expecting robust interest in this property.”

Local agent Lia Pauley says Kaitaia is a popular town on the Far North tourist trail, and the KFC outlet appears well-supported by both visitors and locals.

“SH1 is only 350 metres away, so the travelling public can easily-access the property and it’s the only KFC outlet in the district,” she says.

“Anecdotally, we’re told there are regularly lines out the door over the busy summer season so the location clearly suits the tenant, as evidenced by the long-term lease in place and the recent tenant-driven refurbishment/modernisation of the interior.

“It’s also within walking distance of the Kaitaia town centre, which is in-line for a streetscape and public amenity upgrade.”

Pauley says an investor with some connection to the Far North district, perhaps Auckland-based but with a holiday home in the area, could be attracted to this property.

“This is a well-returning bricks-and-mortar investment and while property tends to be fairly tightly-held in Kaitaia with a loyal local investor catchment, an out-of-town buyer will recognise the value here, at an affordable entry point with a credible tenant covenant.”

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