Holt Commercial has advised on the sale of a roadside drive-thru development in Shropshire.
Investment specialists at Harris Lamb acquired the development on behalf of Lightstone Properties Limited for £2.6million.
Located at the junction of the A5 and A483 in Oswestry at Mile End Roundabout, the site comprises a Starbucks, KFC and an OK Diner, and is the latest roadside development of its type to be added to the investor’s portfolio.
Holt Commercial acted for the vendor, a family pension fund.
David Allen, Director of Holt Commercial, said “Our client is delighted with the outcome and this deal fits into the asset management plan we set out. We saw an opportunity to improve the value of the development through the latest round of rent reviews and that has been reflected in the purchase price. The drive thru sector is an area of growth in the market and this deal in Oswestry underlines that.”
Justin Marshall, who oversaw the purchase, said “This is a prime development located at a very busy location along the main route for visitors travelling to Snowdonia National Park, with more than 27,000 cars passing it every day. It is an incredibly popular spot and benefits from a great deal of trade.
The site comprises of two purpose-built drive thru restaurants, trading as Starbucks and KFC, together with shared 43 spaces in a central car park. he KFC provides 77 covers inside and 48 outside, whilst Starbucks provides 60 covers inside and 30 outside. In addition, the site houses an OK Diner. The opportunity was an excellent fit for Lightstone Properties, which has several other roadside assets, including drive thru schemes, and was keen to add this one to its portfolio.”
Lightstone agreed to purchase the asset for £2.6m, representing a 6% Net Initial Yield, from a family pension fund.
Justin added “The property, which is principally let to Starbucks and KFC on leases that expire in 2031 and 2033, were last reviewed in 2018 to £37.50 per sq ft and £29.00 per sq ft respectively. These are both soft rents in today’s market, and should perform well into the future. The UK drive thru sector is in a phase of expansion, with new entrants into the market, and this demand will push rents on even harder.”