Until now, multi-storey car parks have barely been on investors’ radars. Ongoing yield compression of traditional property investments is changing all that. There are currently around 300 million public parking spaces in Europe and 48,000 multi-storey car parks. However, there is a vastly diffuse nature to the companies that provide parking facilities, lacking in uniformity.
Investors are becoming more aware of multi-storey car parks in terms of two essential aspects: cash flow and appreciation potential. Throughout Europe, Catella’s analyses indicate that the outlook for these two areas will remain exceptionally positive for the years to come. Average purchase yields in Europe are around 6.5 % at the moment, making them much higher than those for traditional investments in office and retail space. These are just some of the results from Catella’s analysis in the September 2016 market tracker.
Catella defines the total population of the multi-storey car park market in Europe as around 48,000 properties. Around 40 % of these are operated by municipalities and commercial enterprises (e.g. shopping centres), 30 % are assigned to the entertainment industry (e.g. theatres/cinemas) and around 10 % are located at airports. The remaining 20 % can be assigned to a diffuse user structure.
With regard to yields from multi-storey car parks (total turnover in Europe in 2015: € 8.58 billion), Germany has the largest share at around 25 %, followed by France (17 %), the UK (16 %), Italy (15 %) and Spain (8 %). If we consider the number of off-street parking spaces by number of inhabitants, it becomes clear that the Nordic countries in particular have a high proportion of off-street parking. With 9.82 % and 8.25 % respectively, Sweden and Finland are significantly above the European average of 5.4 %. In Germany, this proportion is 6 %, and in Italy just 2.3 %.
“The trends towards car sharing, electric vehicles and highly automated driving do not pose any disadvantages in terms of investments in multi-storeys. On the contrary, they will boost demand for paid parking. Clear excess demand strengthens the market power of the operators and will generally enable higher prices,” says Thomas Beyerle, Head of Group Research at Catella.
