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Parking as a real estate asset is not well understood and that is what makes it so attractive! Parking has a significant impact on the growth of cities. The availability and quality of parking options affect the way businesses and individuals choose their location and where promoters build new real estate projects. According to Global Smart Parking Market, the parking industry is expected to grow by US$7.4 billion by 2025. The purpose of this article is to better inform real estate promoters and investors about the various opportunities offered by this industry.
To begin with, we must underline the fact that the parking sector is fragmented, with high barriers to entry, constant cash flows and low recurrent capital requirements. In large urban markets, some investors prefer to own parking lots rather than office buildings. Unlike these buildings, you do not have any major initial leasehold improvements. In a weak market, these costs can be devastating for an office building owner. Real estate experts are unanimous: residential and office buildings are less profitable than parking lots. It should also be noted that the amount of parking available in most urban areas is increasingly limited as demand increases. Therefore, one can say that the parking sector is a new and expanding market in which investors might be interested.
To know more about this subject, discover our article :
Mutualized parking lots: a solution for urban mobility
This long-term imbalance between supply and demand is an opportunity and creates a rising tide that not only benefits all parking lot owners, but also car owners. The smart parking market in Europe is expected to grow by 9.6% over the projected period (2019 - 2024). Technological advances such as autonomous cars and smart parking technologies, as well as significant investments by governments around the world in the development of smart cities, will provide enormous commercial potential. Mobile applications on smartphones that collect information on location, hours of operation, pricing and other facilities will allow drivers to record the GPS position of their car in a crowded parking lot, with additional notes and photos helping drivers to rely on smart parking.
The growing need and increasing investment in this market are creating a climate of opportunity, that will undergo huge developments over the upcoming years.
The following seven factors play a critical role in the success of a parking lot and should be carefully considered by any promoter or investor.
Buyers are more attracted to assets that are well located and surrounded by amenities that will increase the number of visitors (entertainment, hotel, retail, nightlife, office, etc.).
Strong urbanization trends in most urban centers across the country have increased the demand for parking spaces, while stimulating new developments that could reduce the supply of surface land and driveway parking.
Does the asset offer services that may attract other vehicles such as electric cars and bicycles or scooters? Do the additional services provided justify high parking rates?
Naturally, assets that are easy to enter and exit are more attractive to drivers. A system of smart barriers is strongly recommended.
Availability of public transportation, walkability and/or predominance of carpooling.
If you are interested in the promotion of public transportation and carpooling within companies, these 2 blog articles will be useful for you :
How to promote public transportation within your company?
>>> How to encourage carpooling within your company?
Security and safety promote healthy demand in structured parking lots.
If you are interested to know how to secure your parking, discover our article:
9 tips to make your parking more secure
The implementation of user-friendly technology that simplifies payment and access can increase parking revenues. Not to mention, a parking management software allows parking lot owners to successfully manage their different sites in a single platform. For a low cash inflow, parking spaces can offer buyers an exceptional return on their investment with a high rental yield and rental insurance widely available in this asset class.
To conclude this article, the parking sector is rapidly evolving and should not be forgotten when considering investments opportunities. Would you like to know more, receive advice, or find out how you can make money with your parking? Feel free to contact us!
