LondonMetric has entered the drive-through market after buying an eight-asset portfolio let to roadside retailer Euro Garages.
The REIT is looking to take advantage of trends brought about by the growing electric car market with the opportunity to install charging points at some of the properties.
It is expected that dwell times and spend could increase at drive-throughs as a result of the increased use of electric cars, with some taking 30 minutes or more to charge.
The circa £12m portfolio is understood to have been bought from investment group Dwyer Property.
The two largest assets in the portfolio are located in Bicester, accounting for the majority of the deal value. LondonMetric is also expected to sell on two of the smaller locations.
The sites are thought to be let on 24-year leases with annual uplifts of 2.25%.
The locations include franchise agreements with Starbucks, Burger King and Subway.
Blackburn-based Euro Garages operates 466 to-go outlets, which also includes drive-through sites for KFC and Greggs.
Asset management opportunities
Lengthy leases, multi-let agreements, the outlook for rental growth and the potential to significantly increase land values are some of the factors that a growing number of investors are finding attractive about the drive-through sector.
Further signposting the current heights of private investor demand, Morrisons sold a Costa Coffee drive-through at its Leamington Spa site at Acuitus’s commercial auction last week for £1m, reflecting a 6.5% yield.
Six of the nine drive-through outlets it has sold since 2012 – with covenants including McDonald’s and KFC – have achieved sub-6% yields.
FSP advised LondonMetric; Knight Frank acted for the vendor.
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