A pair of Sydney retail food properties have been successfully sold through online bidding as the commercial sector looks for ways to adapt in the wake of the COVID-19 outbreak.

KFC Dulwich Hill was purchased $4.26 million on a 3.17 per cent yield- the lowest yield ever recorded in Australia for a fast-food retail asset- while Chambers Coffee in Rhodes was sold for $2.99 million, representing a 6.02 per cent yield. 

The two properties were bid on by 11 private investors that accessed the online bidding platform, as well as phone bidding and in-person at the live Auction room at Cooley Auctions and remote rooms in Melbourne and Brisbane. 

At a glance:

• A pair of Sydney retail food properties have been successfully sold through online bidding.
• KFC Dulwich Hill was purchased $4.26 million on a 3.17 per cent yield while Chambers Coffee in Rhodes and was sold for $2.99 million, representing a 6.02 per cent yield. 
• Yosh Mendis and Michael Collins of Cushman & Wakefield managed the sale of Dulwich Hill KFC, while the sale of Chambers Coffee in Rhodes was brokered by Geoff Sinclair and Yosh Mendis. 

Those who attended the live auction were subject to stringent social distancing measures in line with government and World Health Organisation guidelines in place at the time. 

This included screening bidders before entry, having chairs 1.5m apart, providing hand sanitiser, encouraging personal hygiene and having separate rooms available to elderly bidders who may not feel comfortable in the main room. 

Cushman & Wakefield’s National Head of Investment Sales, Michael Collins, said the sales highlighted that high net worth investors with significant amounts of cash had continued to target commercial property assets that provide strong yields and the security provided by tenants on long term leases. 

"Our national investment sales portfolio auction platform is one of Australia’s leading avenues for the sale of blue-chip investment assets across Australia and Thursday’s results were a true reflection of this, even during unprecedented times of uncertainty," he said.

“The fact that the Dulwich Hill KFC property was sold on a record-breaking 3.17 per cent yield amid unprecedented market volatility demonstrates that demand for commercial investment properties with strong and secure long-term leases isn’t abating.

“The pioneering of an online auction bidding confirmed that investors have been quick to embrace new technologies and adapt to the realities of the rapidly changing external environment.

"We expect this will become the new norm for commercial property auctions over the coming period."

Mr Collins and Yosh Mendis of Cushman & Wakefield managed the sale of Dulwich Hill KFC, which resulted in over 340 enquiries and 53 contract requests. 

Mr Mendis was also involved in the sale of Chambers Coffee in Rhodes, which he brokered with Geoff Sinclair. 

He said many private investors continued to take a long-term view when it comes to the current dislocations in the financial markets

“We had under bidders from KFC Dulwich Hill who then hotly contested for Chambers Coffee in Rhodes, some who had never inspected the property but arrived on auction day with the single objective of purchasing a long term leased passive investment asset," he said.

"There is an ongoing attraction of assets that are both defensive and offer higher yields compared to other safe-haven investments."

Similar to this:

Parramatta office tower sold for $105.3 million

Trophy office development in North Sydney sold to CBRE Global Investors

Surging rents see Sydney's Pitt Street Mall remain the world’s 7th most expensive retail precinct: report