Investors dine at a fast food restaurant during sold-out auctions in Sydney and Melbourne

“What investors focus on is the length of the lease, the quality of the tenant and the underlying land value.”

In any event, she said, inflation had most likely peaked and was not expected to remain so high for a long time – the average lease term was nine years when the auction of the Melbourne portfolio.

“Landlords haven’t necessarily been winners with inflation-linked rent increases, given that the CPI was just 1.1% not too long ago. [in the March quarter],” she says.

While the average yield has increased 52 basis points to 5.38% this week from previous portfolio auctions in September, Ms. Filmer noted that interest rates had risen 75 basis points over that period.

Fast food outlets were particularly sought after at Wednesday’s auction at Crown Casino, including nearby Carl’s Jr and Taco Bell drive-thru restaurants on the Princes Highway in Beaconsfield, Melbourne’s southeastern suburbs.

Offered on a brand new 12-year lease to the global greasy burger chain, Carl’s Jr sold for $5.454 million on a 4.4% yield while Taco Bell restaurant, offered on a 10 years to the operator Collins Food, listed on the ASX, sold 3.82 million dollars on a return of 4.5%.

Also whetting buyers’ appetites, a cafe in Epping, north Melbourne, sold for $1.05 million on a 4.9 per cent yield, after being offered with a new 10-year lease.

To complement these tasty offerings, a Burgertory restaurant in Mentone, Melbourne Bay, which came under a new 10-year lease to the fast food operator (which has 16 outlets across the city) has sold for $940,000 on a 5.4% return.

Ms Filmer said investments in fast food, considered an essential service during the pandemic, were performing well despite a lack of supply in the market.

Child care centers and gas stations leased to G8, BP and United were also in high demand on Wednesday, while a Goodyear Tire outlet in Hamilton in the Australia region generated 76 offers before selling 13% above of his reserve for $1.13 million on a 5.6 percent return.