Parking Insights 03/16

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Editorial

Dear Readers,

The new year is approaching and we naturally start to contemplate. We become reflective: What did the old year give us? What do we want to achieve in 2017? For me personally, as the quieter days give me the chance to reflect, I become more conscious of the extent to which digital technologies are shaping our actions and driving our ambitions. The sector in which APCOA operates will change significantly in response. It is now no longer just about developing the best strategies. We also need to transform our great ideas into reality – and we need to do so quickly, because the opportunities of digitalisation for car park operators are immense.

At APCOA we have started to take the necessary steps. Strategies have long been prepared. In a “Connected Car Park” we will be able to offer our customers the highest standards of convenience. We will support autonomous parking and transform our car parks into Mobility Hubs with charging stations for electric vehicles. New technology means we will learn a great deal more about our customers than is currently the case, and new channels of communication will open up, via which we will be able to offer customers a full range of ancillary services. In doing so, we will create substantial new revenue streams for car park owners.

APCOA has long been working on turning this vision of the future into a reality. In the last few months we have launched two major, new strategic initiatives, “Connected Consumer” and “Connected Car Park” and developed ambitious plans for the future of our business. Rapid implementation is now underway. By the end of next year, for example, at least 300 of our car parks will be “connected”. We’ve already installed automatic number plate recognition at 80 of our UK sites, and 100 facilities in Germany are now equipped with RFID systems. Before the end of this year, APCOA will also have 200 charging stations for e-vehicles operating at 100 sites across Germany, and this is just the beginning.

All signs point to 2017 being an extremely exciting and successful year. I’m looking forward to continuing our journey with you.

Your Philippe Op de Beeck

Multy-Storey car parks offer attractive returns

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Until now, multi-storey car parks have barely been on investors’ radars. But this is currently changing. Investors are starting to realise that car parks, in contrast to other real estate investments, offer them the chance to earn very attractive returns on their investments – with yields stable and rising.

For institutional investors, an investment in a multi-storey car park is not only a way to diversify their portfolio, it is also an opportunity to earn healthy yields – as the financial analysts at Catella have confirmed. In its Market Tracker 2016 “Parking Facilities in Europe – a Market with Space for Investors”, the investment specialist analyses growth and yield potentials within the multi-storey car park sector. The experts stress two main arguments: the potential for both cash-flow and value growth. In both respects, the perspective over the next few years is rated as extremely positive – and their assessment applies to the whole of Europe. Average purchase yields are around 6.5% at the moment, making them much higher than those for traditional investments in office and retail space.

Catella sees multi-storey car parks used by different groups of tenants, i.e. those used by a combination of companies and private consumers, as particularly attractive properties for investment. The total annual turnover generated by Europe’s parking sector has amounted to billions of euros for many years now. In 2015 alone, turnover from the roughly 48,000 multi-storey car parks in the EU’s 28 member countries was € 8.58 billion. Germany had the largest share of turnover at around 25% – followed by France’s 17%, Great Britain’s 16%, Italy’s 15% and Spain’s 8%. The analysts identified significant potential for further yield growth as a result of the existing potential to increase parking charges. “We expect to see significant growth in prices/parking charges across all European countries”, reveals the study. Parking charges have been rising at a rate that is well above the inflation rate over the last few years. For example, parking charges for short-stay parking in Germany have increased by an average of 2.9% over the last five years, in Great Britain by 3.6% and in Norway by 4.6%. At the same time, customers are increasingly willing to pay higher charges – while also reducing the duration of their average stay. Catella’s analysts are confident that this trend will continue for the foreseeable future. They do not believe that car-sharing, electric vehicles and highly automated driving pose any disadvantages for multi-storey car parks – on the contrary, they will boost demand for paid parking and enable operators to provide ancillary services, such as charging stations, and make efficiency gains as a result of better space utilisation. The Catella study highlights the fact that excess demand for parking also strengthens the market position of car park operators, which means they can generally increase prices. Catella’s experts rate operating risks as relatively low because even if an operator becomes insolvent, this does not mean that cash flows necessarily come to a halt. Parking charges have been rising at a rate that is well above the inflation rate over the last few years. For example, parking charges for short-stay parking in Germany have increased by an average of 2.9% over the last five years, in Great Britain by 3.6% and in Norway by 4.6%. At the same time, customers are increasingly willing to pay higher charges – while also reducing the duration of their average stay. Catella’s analysts are confident that this trend will continue for the foreseeable future.

They do not believe that car-sharing, electric vehicles and highly automated driving pose any disadvantages for multi-storey car parks – on the contrary, they will boost demand for paid parking and enable operators to provide ancillary services, such as charging stations, and make efficiency gains as a result of better space utilisation. The Catella study highlights the fact that excess demand for parking also strengthens the market position of car park operators, which means they can generally increase prices. Catella’s experts rate operating risks as relatively low because even if an operator becomes insolvent, this does not mean that cash flows necessarily come to a halt.

Parking as we now know ist will soon be a thing of the past

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Dr. Ralf Nicodemus,Project Connected Parking, Robert Bosch GmbH

Robert Bosch GmbH is working on the future of mobility. This vision includes the connected car and automated driving. These technological developments will also result in new solutions for the parking sector. Dr. Rolf Nicodemus, head of Bosch’s Connected Parking project, reveals what the future will look like.

What is your vision for the parking of the future?

Parking as we now know it will soon be a thing of the past. It starts with the messages drivers will receive to let them know where to find vacant parking spaces. And it ends with the ability to start a shopping spree in the centre of a pedestrian zone, rather than in a car park. We are aiming to completely automate the parking process. With Automated Valet Parking, drivers will exit their cars in a designated zone just inside the multi-storey car park. Drivers will use their smartphones to “tell” their cars to park and technology will take care of the rest. The combined system of car park infrastructure and vehicle sensors, and the networked communication between the two, will enable cars to drive themselves safely to their allocated parking spaces – and return to the valet zone in the same way.

That all sounds very convenient for drivers, but are there any advantages for car park operators?

This will create massive benefits for car park operators. They will be able to make much better use of the space in their car parks. Even less attractive and more remote parking spaces will be fully utilised by the system. It won’t make any difference to customers, as all they will ever see is the valet zone when they drop off and collect their cars. Fully automated parking will also mean that no cars will take up more than a single parking space. This convenience and efficiency means that car park operators will be offering their customers a significant value-add service.This will definitely enhance the attractiveness of a car park. And it will open the door to ancillary services.

Such as?

Such as the automated delivery of luggage or shopping bags to the valet zone. Suitcases and bulky items can be transported automatically and drivers will just have to load them into their cars as they collect them. There are also security and safety benefits. There will be no more dents caused by careless driving, as cars will manoeuvre in and out of parking spaces by themselves. And there will be almost no risk of physical attacks, as drivers will only ever enter the closely monitored and highly frequented valet zone.

Does Automated Valet Parking pose a challenge for parking facility operators?

The technology required for our Automated Valet Parking can easily be retro-fitted into existing multi-storey car parks. The successful operation of the system will depend on a good working partnership between the car park’s operator and the technology provider. And a degree of digital understanding would certainly be an advantage.

APCOA expands its portfolio with reknow objects

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APCOA operates the Elbphilharmonie car park

The people of Hamburg have had a long wait, but the pride of the Hanseatic City is now complete: The Elbphilharmonie. The venue boasts both a large concert hall for 2,100 concert-goers and a smaller hall for up to 550, a 224-room hotel and a range of restaurants, bars and cafés – and, of course, a multi-storey car park, which APCOA has been operating since November 1. The spacious and well lit car park has a total of 433 parking spaces and is open around the clock. On the ground floor, which provides direct access to the concert hall and hotel, a VIP parking area has been created, offering visitors both over-sized parking spaces and proximity to the entrance.

APCOA finalises contract with the Ricoh Arena in Coventry

The Ricoh Arena in Coventry is the joint home of Wasps RFC rugby club, a team in England’s top rugby league, and Coventry City Football Club. The Ricoh Arena also contains two restaurants, a hotel and one of the country’s biggest casinos. APCOA UK & Ireland has now reached agreement with the arena’s management to operate the stadium’s 2,000 on-site parking bays. APCOA will also manage traffic to and from the public parking spaces. With this new agreement, APCOA continues its expansion across the British Midlands region. The contract also marks the company’s entrance into the British event management market. The contracting partner, Arena Coventry Limited, has announced that it is committed to a long-term partnership with APCOA. APCOA was selected on the strength of its parking space reservation system, operational excellence and experience in talent management.

Heimstaden appoints APCOA to manage 15,500 parking spaces

The Swedish real estate company, Heimstaden, specialises in the acquisition and management of residential real estate in Scandinavia. Heimstaden has 16,500 rental properties in 18 Swedish cities – which have a total of 15,500 parking spaces. In 2016 Heimstaden and APCOA finalised a parking management agreement. APCOA’s long-standing experience and operating success in Sweden were key factors in securing the agreement. APCOA has been appointed to manage parking subscriptions, ticket machines for short-stay parking, security and the control centre.