Traditional property investors focus on residential, office, or industrial premises when targeting premium purchases.
But the average UK driver spends £2000 per year on parking — so car parks represent a healthy income stream that shouldn’t be overlooked.
As is the case with any commercial real estate, some locations are more desirable (and profitable) than others.
So if you’re ready to dip your toes into an alternative market, here’s why you should consider adding a car park to your property portfolio.
There were 45.5 million active British driving licenses in 2015 — according to a DVLA Freedom of Information (FOI) request response.
And demand for new car parks is closely linked to the development of new residential and commercial properties that aren’t always well connected to public transport infrastructure.
For example, Westfield London shopping centre’s car parking facility has space for 4500 vehicles and is adding another 1000 slots as part of an expansion project.
So keeping your finger on the pulse of retail development projects might mean you’re first to spot similar investment opportunities.
And apart from the outlay for building and maintenance, the running costs of a car park compare favourably to other commercial enterprises — they’re either fully automated or require a skeleton staff and it’s possible to outsource the day-to-day operations to a facilities management company.
Park and ride
Limited parking spaces in busy towns and cities have led to the construction of park and ride facilities on the outskirts — after dropping off vehicles, drivers take public transport into city centres to shop and socialise.
And some park and ride facilities are either constructed alongside busy train stations or act as outlying hubs.
There are around 100 park and ride facilities across England and Wales and the largest offer 5000 spaces, so there’s plenty of foot-fall.
The scheme was initially the preserve of the public sector, but bus giant stagecoach opened the first private sector park and ride in Manchester in 2015 — following their pioneering lead might be worthwhile.
For many commuters and holidaymakers, finding a convenient, secure and cost-effective airport parking space used to be a bit of a conundrum.
But most airport operators have made genuine efforts to improve their provision — sometimes working in collaboration with specialist private sector partners.
For instance, Edinburgh is undergoing major refurbishments as part of a project that will increase its passenger capacity from 12 to 16.5 million by 2021.
But management has ensured that finding spaces is reasonably straightforward throughout the transition period, thanks to the range of in-house and private parking options available near Edinburgh airport.
So as long as a significant portion of travellers reach airports by car rather than other forms of transport, investing in airport parking might be an interesting investment option.
Public transport links to major city centres are improving in some respects — but when visitors want to shop, they often prefer the convenience of bringing their own vehicles.
Meanwhile, parents with children might prefer to avoid the hubbub of buses and trains by journeying in private vehicles.
And some popular tourist spots simply don’t have enough spaces to cope with demand — in summer 2017, Police Scotland advised visitors in vehicles to the Isle of Skye to stay away as it was backed up by motorists trying to slot into an elusive spot.
If you’ve got the wherewithal to purchase city centre real estate, car parking can offer a steady income stream.
So the next time you pore over an online property registry, remember that diversifying your portfolio with a car park might be the key to success.