Kaitāia property sale will have developers licking their lips

The property, 237 Commerce St, Kaitāia, that houses KFC is up for sale.

A tasty real estate opportunity is up for sale in Kaitāia that is likely to have developers licking their lips with excitement.

Contrary to the marketing mantra of the long-term tenant of a Kaitāia commercial property that’s now for sale, there’s no secret recipe for the passive investment opportunity in the Far North’s second-largest town.

The selling agents say location, appearance of the building, strength of the tenant and long-term tenancy are criteria that discerning investors and their financiers both demand and expect of an asset — particularly in a market with lingering headwinds.

Since 2001, the building at 237 Commerce St has been leased to Restaurant Brands Properties, trading as KFC.

The KFC Kaitāia 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 January 31, 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 202sq m building occupies a flat, landscaped 1404sq m site with significant frontage to Commerce St — the town’s main thoroughfare.

The single-level building has recently had tenant-funded refurbishment works. The freehold land and purpose-built premises associated with KFC are for sale by deadline private treaty closing at 4pm on September 21, unless sold prior, through Lia Pauley and Dickie Burman, Bayleys in the North, and Mike Houlker, Bayleys Auckland Central.

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

Houlker said 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,” he said.

Pauley said Kaitāia is a popular town on the Far North tourist trail, and the KFC outlet appears well supported by visitors and residents.

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

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