A freestanding McDonald’s in Melbourne’s southeast has sold under the hammer for $4,714,000, setting a new benchmark for a freestanding McDonald’s investment nationally.
The newly built Hampton Park property at 59 Hallam Road was sold at a public on-site auction by JLL’s Dominic McGrath, Romanor Falconer, and MingXuan Li. The campaign culminated in a fiercely contested auction that drew nearly 100 attendees and 33 registered bidders.
Mr McGrath said the result was extraordinary.
“At a 2.78% yield, this is the sharpest result ever achieved for a McDonald’s freehold investment nationally. The outcome reflects both the scarcity of these assets, being just the second McDonald’s offered to market in the last 10 years in Victoria, and the weight of private capital chasing income security,” he said.
“We see this result as a clear endorsement of the benefits of an on-site auction, where the sales team and auctioneer can dedicate their full attention to a single asset and client, free from the time pressures and distractions from other competing assets”.
Mr Falconer said the strong competition demonstrated the enduring appeal for long-leased fast-food investments located in strategic growth corridor locations.
“The level of enquiry and bidding we saw is testament not only to the strength of the McDonald’s covenant but also to a positive shift in market dynamics, with Australia’s sustained declining debt environment driving an influx of new and repeat investors looking to deploy capital in the latter part of 2025,” he said.
“Fast-food tenanted investments offer bond-like security with low-risk profiles, attributed to their long-term leases to globally recognised brands, fixed rental increases, minimal management requirements, and prime high exposure locations, all factors which fuel investor competition.”
The sale price came in roughly $1 million above the vendor’s reserve. The property was ultimately secured by an Asian investor following strong competition from both local, interstate, and offshore parties.
The campaign generated an enormous response with more than 800 enquiries, underscoring the depth of private investor demand for fast-food assets with long leases to blue-chip tenants.
“This is a landmark result for the Quick Service Restaurant (QSR) sector and a clear indication of the confidence investors place in resilient retail investments,” Mr McGrath said.
“Assets leased to McDonald’s are among the most tightly held asset classes in the country, and we anticipate this result will further drive appetite across the broader fast-food sector.”
The property was underpinned by a 20-year net lease to McDonald’s Australia Limited, expiring in 2043, with fixed annual rental increases of 2.5%. It generated the highest number of enquiries of any property in Victoria listed on CommercialReady.
