By ANNE GIBSON
Restaurant Brands is selling 51 of its 87 KFC stores for an expected $45 million.
The stores will then be leased back, in line with the company's strategy of investing in operational improvements rather than property.
Restaurant Brands company secretary Grant Ellis said part of the reason for
the KFC property sales was to mount a substantial expansion of its Starbucks coffee house chain.
"We have 30 Starbucks now and I hope that in a year's time, we will have 40," he said yesterday. Money would also be reinvested in Pizza Hut and KFC, he said.
Peter Herdson, director of commercial sales at Colliers Jardine, which is marketing and auctioning the properties, said yesterday that he expected the KFC outlets to sell for between $300,000 and $1.5 million each. The stores will be auctioned early next month.
One of the most valuable KFCs is at Royal Oak, in Auckland, which will be rented back for about $146,000 annually, Mr Herdson said.
The stores will all be leased back on 12-year terms and include outlets from Kaitaia to Invercargill.
Mark Synott, managing director of Colliers Jardine, said the sale was a big deal.
"This is the largest single-tenant property portfolio to be marketed, edging ahead of the BNZ portfolio of properties in 1996."
Colliers Jardine also marketed and auctioned 35 ANZ branches in September. Those sales raised $23 million.
KFC has 87 outlets in New Zealand, of which 30 are leased and the balance owned.
The company will keep six sites in the interim.
"The company has had, since inception, a policy of not owning its sites, preferring to invest in equipment and improvements," Mr Ellis said.
"It leases all of its Pizza Hut and Starbucks Coffee sites."
The KFC properties will be auctioned in Auckland on December 5, Christchurch on December 6 and Wellington on December 7.
