Driven by relentless consumer demand, Australia's fast food industry has shown robust performance with $136,304,000 in investment transactions over the past financial year. 

Burgess Rawson’s Fast Food Industry Insights report found that cap rates continue to firm, dropping from 4.46 per cent in the second half of 2023 to 4.42 per cent in 2024. 

Burgess Rawson National Partner, Yosh Mendis said regional fast food outlets are recording strong  results due to newly developed investment properties recently being sold at auction and limited  ‘freehold’ opportunities in the metropolitan areas. 

“Cap rates for regionals centres are at 3.62 per cent compared to 4.72 per cent for metro fast food outlets. 

“Historically, metro cap rates have outperformed regional transactions. However, starting in 2021, this trend reversed primarily due to more top brands such as McDonald’s being sold in regional towns. 

“Investors are holding on to their premium metropolitan assets creating a flurry of activity in the regional counterparts,” he said. 

Mr Mendis emphasised how the fast food sector has demonstrated remarkable stability over the past five years. This data highlights the industry’s resilience even in the face of challenges like rising interest rates. 

“Australia's fast food industry has proven to be a the most sought after asset class for investors,  offering a blend of secure returns, robust growth, and a dash of innovation.  

“The strength of a fast food brand plays a crucial role in determining the capitalisation rates of its sales.  

“Global giants like McDonald’s and KFC with well-developed networks in Australia benefit from strong brand recognition with investors, leading to lower capitalisation rates. In contrast, niche brands might face higher rates due to perceived risks relating to their permanence and longevity.” 

According to the report, with a population of over 26.6 million people, Australia boasts a staggering  ratio of one fast food outlet per 880 individuals, making it a hotbed for culinary convenience.  

Mr Mendis said premium locations play a pivotal role in the success of fast food investments, with  establishments strategically positioned in high-traffic areas near major highways, shopping centres, and tourist destinations. This ensures a steady flow of customers and heightened visibility, translating into  stable revenue streams and attractive returns for investors. 

“The future of the fast food industry in Australia is poised for transformative growth and continuous innovation, driven by evolving consumer preferences and rapid technological advancements. As the  industry contributes significantly to the GDP and grows faster than the broader economy, it stands at  the forefront of the commercial property investment landscape.” 

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To request a copy of the Burgess Rawson’s Fast Food Industry Insights report contact one of the four national fast food team members via the below contact details.