Private investors are hungry for fast food real estate – and they’re willing to pay a premium in pursuit of long-term, recession-proof returns.
Fresh data from the Burgess Rawson from CBRE team shows that demand for drive-thru assets is heating up, with sales surging 62% to $228.9 million in the 2024-25 financial year.
We spoke to Senior Director Yosh Mendis to find out what’s fuelling the demand, and what it could signal for the year ahead.
Fast Food Sizzles in Hot Market
Mr Mendis said strong consumer appetite for convenience and accessibility, combined with reliable income streams from household name national tenants, is driving investor interest.
“These assets are considered recession-proof, offering security in certainty across any market,” he said.
In addition to stable leases, core location factors are playing a key role in buyer decisions.
“We are also seeing a tightening of newly built assets coming to the market where these products are becoming increasingly rarer due to increased land and construction costs,” he said.
“This has led to increased competition for assets which have come to market.”
Essential Services Serve Up Solid Results
The broader essential services category also delivered robust growth, with double-digit gains across key segments.
The agency recorded $293.7 million in childcare property sales - up from $284.9 million in the previous financial year - and $228.3 million in convenience retail, representing year-on-year growth of more than 25%.
Overall, the agency transacted $1.69 billion across 382 properties in FY25 – a 21.96% increase in value, despite deal volumes remaining largely flat.
This suggests that investors are paying more per asset and focusing on sectors backed by strong tenant demand and consistent, everyday demand.
“Healthcare, childcare, and convenience retail are also gaining momentum, reflecting growing demand for essential community services with strong tenant covenants,” he said.
“These asset classes have always performed well in the market, and we continue to see investor demand strengthening for these assets nationally.”
Private Capital Drives Momentum
Mr Mendis said family offices, SMSFs, and individual investors continue to lead activity in essential services real estate.
“There has been a continued increase of buyer demand across the entire private wealth sector, including SMSFs and family offices,” he said.
“These groups continue to be attracted by the stable yields and long-term growth potential in drive-thru and essential service properties.”
Deals Closing Fast as Confidence Builds
Assets are changing hands at record speed, with confidence surging on the back of expected rate cuts and a defensive tilt in investor strategy.
The firm’s internal Commercial Market Index (CMI) hit a record high of 123.09 in June, tracking the number of assets sold within 60 days.
That’s nearly 19% above the long-term average, indicating a fast-moving market and high buyer confidence.
With rate cuts tipped and essential services viewed as safe-haven investments, Mr Mendis said momentum shows no signs of slowing in the year ahead.
“Demand continues to be robust and is expected to continue into FY26, driven by ongoing consumer preferences, projected interest rate reductions, and the defensive nature of these asset classes,” he said.
