Technology has left a seismic imprint on our culture and commercial real estate and in the past 12 months, this has been compounded by the Covid pandemic. Whilst restaurants and shops have been forced to close, one sector that seems to be bucking the trend is the ‘drive through’ sector. McDonalds, Starbucks, Costa, KFC, Burger King, Pizza Hut are all perfect examples, while the seating part of their property is temporarily closed and taped off, both cars and delivery drivers are queuing around the block.
Not only are they almost the perfect quick service, contactless, cheap, repeat business and socially distanced retail product but they are also highly in demand from investors. In August 2020, a Starbucks drive through in Nottingham was forward funded with a 20 year unbroken lease on a net initial yield of 6.25%.
With the inevitable emergence of autonomous vehicles into mainstream society, these commercial real estate admonitions for drive-throughs need to be heavily considered when looking to invest in retail space today. Self-driving cars which can navigate from A to B without intervention, means you can be consuming your purchase while ‘driving’. And fully driverless cars mean you could send your car to the drive through for you after having ordered, paid directly from your app and then instructed your car where to go.
The real estate landscape is restructuring once again and investors are rightfully redrawing their maps to succeed in the soon-to-be driverless world. With the imminent global commercialization of these vehicles will come a deep-seated and permanent structural change to the way we interact with real estate-transforming how we live, how we work, and how we commute to our favourite fast food franchise.
