Queensland's Fast Food Investment Market: What's Selling, at What Price, and Where It's Heading
Queensland's quick-service restaurant (QSR) sector has quietly become one of the most competitive sub-sectors within the broader net-lease retail market. Anchored by long WALE covenants, CPI-linked rent reviews, and the operational resilience of household-name tenants, assets leased to the likes of Guzman y Gomez (GYG), KFC, and Red Rooster have attracted both private syndicates and institutional mandates across the state's metro and regional markets.
Below, we examine the key themes emerging from QSR transactions across Queensland in the second half of 2025 through to early 2026.
The Investment Thesis: Why QSR Assets Remain in Demand
The structural appeal of fast food real estate is well understood by experienced investors. Absolute net leases, corporate or franchise-backed covenants, and drive-through configurations that underpin strong trading performance continue to justify yield premiums over comparable freehold retail.
In Queensland specifically, population growth corridors — particularly in South East Queensland — have reinforced operator expansion, which in turn has driven a pipeline of new-build sale-and-leaseback opportunities. Investors have responded accordingly.
Key Themes Observed: H2 2025 to Early 2026
GYG: Rising Covenant, Rising Pricing Pressure
Guzman y Gomez has emerged as one of the most sought-after covenants in the net-lease QSR space following its ASX listing. Queensland assets leased to GYG — particularly drive-through formats in growth corridors such as North Lakes, Ipswich, and the Gold Coast — have drawn competitive bidding. The brand's rapid expansion footprint and long-dated leases have translated into yield compression for well-located assets, with investor sentiment firmly tilted toward core-plus positioning.
KFC: Institutional Grade, Proven Liquidity
KFC freehold investments remain the benchmark covenant within the QSR sector. Queensland assets — spanning Brisbane's outer suburbs through to regional centres — have continued to transact with confidence. The combination of corporate-backed leases, established drive-through infrastructure, and predictable rental escalations keeps KFC assets firmly on institutional shopping lists. Pricing has held firm, with no material softening observed despite the broader interest rate environment.
Red Rooster: Regional Value Proposition
Red Rooster assets, while carrying a lighter covenant profile than KFC or GYG, have found a receptive audience among private investors and syndicates seeking higher entry yields in Queensland's regional markets. Locations including Townsville, Rockhampton, and Cairns have offered investors yield differentiation relative to South East Queensland pricing, making them a relevant portfolio diversification play.
Market Outlook: Selective Compression Ahead
The broader net-lease retail market in Queensland is navigating a nuanced rate environment. While the Reserve Bank's easing cycle has provided some tailwind for yield-sensitive buyers, pricing discipline remains evident among sophisticated acquirers — particularly for secondary covenants or assets with near-term lease expiry risk.
For 2026, the following dynamics are worth monitoring:
- GYG assets are likely to see continued yield tightening as the brand's listed status matures and institutional familiarity deepens
- KFC and McDonald's freehold assets will remain tightly held, with off-market deal flow likely dominating
- Regional QLD assets may offer the most attractive risk-adjusted entry points for investors comfortable with covenant trade-offs
- New-build sale-and-leaseback supply from QSR operators expanding into SEQ growth corridors will provide ongoing transaction volume
For advisers and capital allocators, the actionable read is clear: well-located, drive-through-configured QSR assets with 10-plus-year WALE remain a defensive, income-generating allocation in the current environment — but pricing requires rigour, and covenant quality must be the primary screen.
References
- [1] https://www.developmentready.com.au/content-hub/article/commercial-real-estate-deals-of-the-week-2nd-february-2026