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Key Drivers for Drive-Thru Investment Growth in the UK Market

Published : 26/08/2025 by Brett Harrison

The drive-thru sector has emerged as a compelling investment opportunity in the UK commercial property market. At Allsop, we have valued drive thru sites up and down the UK and are well versed in the market intricacies, conditions and the most up to date transactions, therefore we can provide market leading advice to investors and lenders within this asset class in particular.
Below, we consider several interconnected factors which have fuelled this growth:

Key Advantages
Drive-thru investments offer several distinct benefits that have fuelled their popularity:

Covenant Strength: These properties typically attract established brands with strong financial foundations, reducing tenant default risk. Covenant strength is key to pricing!

Long Lease Terms: Drive-thru operators commonly commit to 15-20 year leases, often with inflation-linked rent reviews, providing investors with predictable, long-term income streams

Indexation of income: Typical leases include provisions for indexation to the rent over the term of the lease, thus providing almost guaranteed rental growth.

Strong rental growth: Typical rents on 1,800 sqft coffee shop units were typically £85,000 pa, up to a max of £100,000 pa 12-18 months ago, but we’re now seeing rents well in excess of £100,000 pa which will have implications to older leases with upcoming rent reviews / lease activities.
Relatively low build costs: Typical 1,800 sqft coffee shop style units cost c.£800,000-£900,000 to build, the larger restaurant units will be in excess of, with larger restaurant units costing in excess of £1m.

Small lot size: Drive-thru's are generally affordable to a wide variety of investors, with lot sizes of c.£1.2m-£1.6m depending on rent & yield, and they are typically attractive to cash buyers or those who are less reliant on costly debt.

Operational Resilience: As demonstrated during recent economic disruptions, drive-thru models maintain functionality during challenging market conditions, offering defensive investment characteristics.

Lower Management Intensity: Single-tenant properties with established operators generally require less hands-on management than multi-tenant retail assets.

Adaptability: Purpose-built drive-thru units can be reconfigured for different operators, reducing obsolescence risk.

Potential Challenges
Investors should be mindful of several challenges when considering drive-thru investments:

Planning Hurdles: Securing planning permission for new drive-thru developments can be complex, particularly with regard to traffice management and environmental impact.

Competition for Prime Sites: Increased investor interest has intensified competition for top-tier locations leading to increase in land values, a compression of end-value yields in the prime markets and ultimately pushing rents upwards.

Environmental Considerations: Growing focus on sustainability means investors must consider the environmental footprint of car-centric operations.

Changing Consumer Habits: While convenience remains paramount, evolving consumer preferences require ongoing adaptation of the drive-thru model. Will favour move away from drive-thru's?

Future viability: With significant rental growth in the sector, can drive-thru operators really afford the indexed rent over the term of the lease? Time will tell…