McDonald’s recently renewed its lease for a prime location in Cape Town after a competitive bidding war with KFC.
The 24-hour McDonald’s drive-thru location has entered into a lease agreement with the City of Cape Town and the monthly cost is stupendous.
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The McDonald’s, situated in Green Point, Cape Town, has renewed its lease with the City of Cape Town for R420 000 per month.
The location is renowned specifically because it is based at the entrance to the DHL Stadium.
The stadium, which has a seating capacity of 55 000, is set to host the long-awaited Springboks vs New Zealand rugby match this coming September.
According to Business Tech, McDonald’s ultimately bested KFC and secured the location at a whopping R420 000 monthly rental.
This equates to R5.04 million a year.
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Chris Teague, director of property development and investments firm Flanagan and Gerard, commented that this is no ordinary rental but seems fitting for what is no ordinary location.
Teague went on to say that the location is one of the best pieces of real estate in the country and the rental amount is always a reflection of turnover.
He explains that while it may differ between companies, typically, the tenant and the landlord agree on what a reasonable turnover is likely to be.
This amount is then used to calculate a rental that the tenant can reasonably sustain.
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The R420 000 is thereby deemed reasonable in comparison with the amount of money the location can generate.
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