Car parks shape up for the times

Car parks are undergoing something of a shake up. On the way out are the dingy inner-city car parks most of us are familiar with, set to be replaced with ‘crucial hubs for a wide range of services, which also increases the importance of professional management,’ according to Philipp Op de Beeck, CEO of Europe’s largest parking operator, Apcoa Parking Group.

‘As parking spaces will become increasingly important in the future, letting this valuable asset go unused may prove to be a considerable miscalculation,’ he said. ‘Contrary to some forecasts, most parking spaces will not be replaced by new residential or office developments. Thanks to emerging digital solutions, owners have the chance to create new revenue streams.’

Smaller spaces can also be marketed cost-effectively thanks to digital tools, according to Op de Beeck. ‘Operators therefore need to invest in a scalable database to coordinate their services and users, and also to centrally structure their internal processes and handle accounting and invoicing. Steady data analysis can also be used to continually optimise the service range,’ he said.

The need to spruce up car parks has never been greater, not least because 97% of them in Europe are more than 25 years old, according to Dr. Thomas Beyerle, head of group research at Catella. ‘Only 2% of them were built in the last 10 years,’ he told REFIRE. ‘It’s a niche segment with an interesting story: yields are now around 5.25% to 5.75%, down from 7% in 2016 but the market is very opaque.’

Catella launched its first car park fund two years ago and is taking the value-add route, Beyerle said. ‘We’ve invested between €50m and €85m in European car parks so far. The sector is a moving target, though. You see the hunger in investors’ eyes when they realize that some car parks are charging €8 an hour. But there are no clear regulations for the industry in Europe – it’s a bit of a Gordian knot.’

Investors aren’t deterred, though. Earlier this month,Orange Investment Managers, an Amsterdam-based investor specializing in car parks, opened an office in Düsseldorf. The group intends to invest up to €200m in car parks in the country within two years. The company also operates as an asset manager for car park funds by Catella Real Estate and Quantum Immobilien.

And as more investors dip their toes into the water, car parks are evolving. For example, company parking lots and residential parking spaces can also be viewed as potential assets, where unused spaces could be turned into ‘micro-hubs’, according to Op de Beeck.’ Parcel delivery firm UPS is currently testing this model in Hamburg, using shipping containers as interim warehouses in the city centre, with parcels then being delivered on foot, by handcart or bicycle,’ he said. ‘Unused parking spaces could also be leased out during weekends, either to residents or even to local farmers’ markets in the case of larger spaces. Professional parking operators are the right partner to consult for coordination and management of such projects, however, and in order to guarantee a smooth operation, a data platform and an app are necessary.’ (ssk)