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Monday , 15 July 2024

Parking in Real Estate – A marketing tool for increasing value

The value of an office building reduces drastically if parking facilities are inadequate and a mall will never realise its maximum revenue potential for the same reason. In most buildings, the basement is approximately 25%-30% of the total built up area. A major portion of this is allocated for parking, the rest being for MEP services. The starting point is to determine the adequate size of the car park. Larger than necessary leads to wasteful investment and smaller than required will cause customer dissatisfaction, loss of revenue and reduction in value of the asset. Urban planners have issued development control (DC) rules that specify the number of car bays required per square meter of leasable area. But these may not be realistic as they could be dated and do not differentiate between malls in varied locations. Parking demand also depends up on the asset brand proposition, convenience of public transport and end use. A property with both retail and office suites will require less than the total of the individual components because office car parks are busy during the weekday and retail rush is in the evening or on weekends. So the usage is complementary.

The second objective should be to maximise the vehicles that can be parked. An efficient car park in a mall should be able to turn around 5 times on a busy day. Thus a 500 bay car park should be able to see a throughput of 2500 cars. A car bay is usually 2.5m x 5m and can accommodate 5 motor cycles. In this article the reference is to cars, but the same is applicable to two wheelers. To maximise the dynamic capacity of the car park, ie the turn around, the most important aspect is the design. The various components of this are

? Ramp strategy ? number, width, curvature

? Number of entry and exit lanes for minimal queues. Customers do not like to be kept waiting

? Orientation of driveways ? one way, no intersections or dead ends, optimum width

? Use of mechanical parking ? not recommended for retail.

? Secure pedestrian walk ways

? Vehicle safety measures like wheel stoppers, speed humps, ripple strips, column guards.

? Proper lighting, way finding signage and parking guidance systems helps visitors to find parking spaces easily and have a smooth exit. It also reduces the need to have traffic wardens on the floor, thereby reducing costs

Right sizing and car park optimisation is best done by specialised car park consultants. The maximum advantage of a good design is achieved when implemented at the green field stage. But even for finished buildings, significant value addition can be achieved by working on the design and removing dead / storage areas. Productivity gains up to 20%-30% can accrue.

After design parameters, the tariff structure and mode of collection needs to be determined. Many owners of office buildings make the mistake of giving away reserved parking space free along with the lease or sale of space on the upper floors, even though the cost is the same. This is a huge missed opportunity akin to leaving money on the table. Parking bays should be kept away from office lease. The tenants should be allowed to park after paying a monthly rent. Parking should be assured but not reserved. This will generate a monthly revenue stream to pay for expenses that will keep growing year on year. One can oversell an office car park by about 30% which is equivalent to the percentage of occupants who do not park at any given time due to travel, holidays, sales calls etc.

In a retail environment, it is recommended that tariffs should be progressive and charged at the time of exit. It prevents misuse and helps in turn over. This will require the implementation of a robust car park management system. For the convenience of customers, there should be enough exit lanes so that there is no queuing. For design purposes, 200 transactions per lane may be assumed. A greater throughput may be achieved with the implementation of strategically located pay stations that allow customers to pay before getting in to the car and reduce the transaction time at the exit from 20 seconds to five seconds per vehicle.

Valet service is a great value addition in all car parks. Valet customers usually are wealthier, appreciate the convenience and are willing to pay more for parking. In a retail environment, they can be presented with promotional booklets that offer discounts from key retailers. This help to increase sale of retailers? products and they are more than willing to pay for the booklet. It is a win ? win situation for both. Valet car parking occupies less space as they can be parked tighter – more can be parked in the same space. Retailers can also avail prepaid parking vouchers for customers who buy from their stores to incentivise them. A good valet management system will capture the details of the customers who can later be sent promotional messages by SMS or email

Several branding opportunities exist in the car park. Valet tickets, valet desks, pillars are spaces available to retailers for branding. As awareness about the marketing potential of car parks increases, one will witness the introduction of new products like early bird schemes, loyalty programs, on line booking for the discerning customer.

Property owners can get all these benefits by appointing professional car park operators who are familiar with management systems and design. They will more than compensate for the higher service charge by adding value to the customer. After all the first and last impression of the customer is the car park.

Arvind Mayar
CEO, Secure Parking Solutions (P) Ltd

Secure Parking provides end to end parking solutions including design, parking management systems and operations. The international headquarters is in Sydney with a major presence in Indonesia, Malaysia, China, Singapore, UAE, Lebanon, UK and New Zealand.

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