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 Macdonald wants to rent my land to build a MCD, enquiry on price, land tenure, etc

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ck4
post Oct 8 2019, 10:01 AM

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QUOTE(infiniti123 @ Oct 1 2019, 11:46 AM)
Good morning all, i have a piece of land just beside the toll and beside petronas and petron. Past few months Macdonald recently showed interest in renting the area.

Not sure if anybody has the same experience but what rental am i looking at and the Rental tenure?

i was offered (rough estimation):
12k per month, increment of 7-20% every 3 years
Rental for 30 Years.

i'm kinda skeptical as the 30 years period is the downside for me. By then i'm already 55 years old, who knows maybe i got some plans to develop it.
Recently beside petronas just opened a starbucks, hence mcD became more aggressive and want to up their offer.
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Good Morning, Sir/Mdm,
Firstly, congratulation on being an owner of a piece of land (First liner prime land).
Being trained in Architectural, Civil & Structural and being a consultant in the Property Development from Concept Design to construction till completion plus property management and maintenance industry/environment for more than 40 years from Malaysia, Singapore till London at least give me the confidences to provide you a feasible and more productive proposal for your very valuable piece of land. I am of the opinion that you are throwing away your opportunity to make a good and above average income for life to somebody else instead of making full use of it. So consider the possible return on this land and not wasted your chance of a lifetime. Herewith, is my few professional view cum advices in point form as follows:

a) This is a prime land, meaning it is a FIRST LINER (Facing the main road having high exposure plus at least
reasonable/high traffic. Translate to be concluded as highly feasible for development with lucrative ROI.

b) RM12k is nothing to shout about when loads of merely 1,400 sqft shop lots easily commands more monthly
rental return, just imagine RM40,000 to RM50,000 monthly rental for a tiny 100 sq ft food stall at KLCC food
court Imagine the potential return upon developing the land.

c) Study the possible concept cum type of possible development and guesstimate the possible long term return
upon completion of the development in a few short years time. Develope it yourself if you are financially
able or JV with a honest relative, friend and/or experienced person/company. You can achieve possibly ten time
more monthly return compared to the offer of 30 years lease from a broker profiting from your land,

d) MC Donald and others similar companies surely did a feasibility study before investing in a project, inview of
these due diligence performed, this is a reasonably safe and good ROI development.

e) Conduct a preliminary conceptual layout design in compliance to relevant local authorities
By-Laws and look at the possibly ROI cum bigger monthly income will be your wake up call.

f) Forget about this non feasible 30 years lease offer, and starts planning for the development for more hugely
profitable life long returns.

g) I have a never ending dream of developing a piece of land but never the finance capability to purchase a piece
of prime land to develop, and you are thinking of throwing away this readily available precious opportunity.

h) My personal conclusion, advice and professional view is to forget the 30 years long lease offer and go for
development

Good Day, Good Health, Good Luck and most importantly, make a Good Decision

ck

TSinfiniti123
post Oct 14 2019, 10:08 AM

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QUOTE(ck4 @ Oct 8 2019, 10:01 AM)
Good Morning, Sir/Mdm,
Firstly, congratulation on being an owner of a piece of land (First liner prime land).
Being trained in Architectural, Civil & Structural and being a consultant in the Property Development from Concept Design to construction till completion plus property management and maintenance industry/environment for more than 40 years from Malaysia, Singapore till London at least give me the confidences to provide you a feasible and more productive proposal for your very valuable piece of land. I am of the opinion that you are throwing away your opportunity to make a good and above average income for life to somebody else instead of making full use of it. So consider the possible return on this land and not wasted your chance of a lifetime. Herewith, is my few professional view cum advices in point form as follows:

a)  This is a prime land, meaning it is a FIRST  LINER (Facing the main road having high exposure plus at least
    reasonable/high traffic. Translate to be concluded as highly feasible for development with lucrative ROI.

b)  RM12k is nothing to shout about when loads of  merely 1,400 sqft shop lots easily commands more monthly
    rental return, just imagine RM40,000 to RM50,000 monthly rental for a tiny 100 sq ft food stall at KLCC food
    court  Imagine the potential return upon developing the land.

c)  Study the possible concept cum type of possible development and guesstimate the possible long term return
    upon completion of the development in a few short years time. Develope it yourself if you are financially
    able or  JV with a honest relative, friend and/or experienced person/company. You can achieve possibly ten time
    more monthly return compared to the offer of 30 years lease from a broker profiting from your land,

d)  MC Donald and others similar companies surely did a feasibility study before investing in a project, inview of
    these due diligence  performed, this is a reasonably safe and good ROI development.

e)  Conduct a preliminary conceptual layout design in compliance to relevant local authorities
    By-Laws and look at the possibly ROI cum bigger monthly income will be your wake up call.

f)  Forget about this non feasible 30 years lease offer, and starts planning for the development for more hugely
    profitable life long returns.

g)  I have a never ending dream of developing a piece of land but never the finance capability to purchase a piece
    of prime land to develop, and you are thinking of throwing away this readily available precious opportunity.

h)  My personal conclusion, advice and professional view is to forget the 30 years long lease offer and go for
    development

    Good Day, Good Health, Good Luck and most importantly, make a Good Decision

    ck
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Thank you for your very insightful feedback smile.gif we've gotten another few proposal from other fast food chain and will we considering all our options
anakkk
post Oct 14 2019, 10:23 AM

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QUOTE(infiniti123 @ Oct 1 2019, 12:17 PM)
thank you for the honest opinion! the offer was by a franchisee company as they've been in discussion with us for the past 1year since i was reluctant to accept the 30 Year rent tenure. Now they're back to re-nego again seeing that starbucks has opened just beside.
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mcd and starbucks both under same boss in malaysia confused.gif confused.gif
TSinfiniti123
post Oct 14 2019, 10:57 AM

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QUOTE(anakkk @ Oct 14 2019, 10:23 AM)
mcd and starbucks both under same boss in malaysia  confused.gif  confused.gif
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offers are by franchisee who already have established McD outlets in malaysia.
the franchisee for the SB will be different to the one in McD. Hence a scenario can be that i can get 10 offers to open McD while all 10 offers come from different people smile.gif
anakkk
post Oct 14 2019, 12:45 PM

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QUOTE(infiniti123 @ Oct 14 2019, 10:57 AM)
offers are by franchisee who already have established McD outlets in malaysia.
the franchisee for the SB will be different to the one in McD. Hence a scenario can be that i can get 10 offers to open McD while all 10 offers come from different people smile.gif
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Oh ok ok, didn't aware of that doh.gif doh.gif
ck4
post Oct 17 2019, 11:11 AM

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QUOTE(infiniti123 @ Oct 14 2019, 10:08 AM)
Thank you for your very insightful feedback smile.gif we've gotten another few proposal from other fast food chain and will we considering all our options
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Dear Sir/Mam,

Here is a real life case scenario you can study/confirm to assist you to conclude on.
Back in the mid nineties a friend of my inherited a piece of land at Kedah, and was on the verge of selling it to an offer or RM2 millions. I stopped him from selling it and come up with a concept layout design plus an estimated TDC {Total development Cost) plus a TDV {Total Development Value) feasibility study and concluded a ROI of app Rm5 million plus promised to help him on from commencement till completion of the proposed development , in the end he decided to proceed with proposed development with a layout capital of only RM250,00 (Bridging loan and others acquired). The project was completed with more profits then estimated at RM6.2 millions due to lower cost and lesser amount of out of pocket expenses, it's no secret and the land owner was one named Mr Lau, plus the project was named Taman Emas.

Do a feasibility study and forget about long lease offer and develop it yourself or you will regrets later.
Good Day

ck
Drian
post Oct 29 2019, 09:58 AM

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You have to understand that if there is a mcdonalds it will indirectly increase your land value as well.

You have to look in a bigger picture.


Chisinlouz
post Nov 14 2019, 03:52 AM

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They usually get 30k sqf for a standalone building. Yours is 20k so your location is main point they getting it.

Second...be it 10~50 years, high % rental increment... A couple notice and off they go. Be aware of this. Of course, investing a sum to build an outlet means they are serious too. Make a wild decision benefit yourself wont harm (your pocket).

People talk about ROI. Do some calculations. Sometimes developed doesn't mean u get good return as more cost involved. U might get back a few shop lots. Bear in mind, not all lots u get is the best one.

Leasing the land out appropriately anytime u will get a good return, and most importantly, u still own the land.

Im handling one parcel of land from my friend. This is somewhat similar so hope you get it. smile.gif

vivakarna
post Nov 21 2019, 04:18 PM

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Should open-up your own McD.
kenshi13
post Dec 16 2023, 11:56 AM

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deleted.sorry

This post has been edited by kenshi13: Dec 17 2023, 09:19 AM
subaiku
post Dec 28 2023, 05:34 PM

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QUOTE(edyek @ Oct 4 2019, 10:16 PM)
It's fix at 30 years. Same as KFC. The reason they lock you for 30 years its because they are the one forking out cost to build the drive through, so all cost and risk is taken into consideration hence the 30 years lease.

So, if you think 30 years is too long, then you put discuss an option for them, to sell the land on the 15th year back to the franchisee. Franchisee can buy the land and own it to run the outlet.

For rental amount, cant comment much as too limited info on your land. You can ask around for the rental market, or use valuer to access the rental value for you and negotiate with them, since they are the one approaching you.

If you have plans to develop it on your own, then just scrap off this plan.

BUT, if you can develop a commercial buildings on your own say a row (5 units) of 2 storey shops, you can negotiate and rent the building to them with much more higher rental AND without them locking you for 30 years. You can rent to them for say 10 years on 4+3+3.
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Man, love it when sifus drop knowledge bombs! smile.gif

 

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