PARKING SPACE
BY WINSTON MACE
Investing in Offshore
Commercial Property
A walk in the park...
S
mart investors are always looking for new and
unique investment alternatives to diversify
away from traditional property assets. Knight
Frank reports growing interest in a rising array of
alternative investments, including parking, student
accommodation, healthcare, hotels and leisure and
petrol stations. KPMG also concludes in its Real
Estate Invest Survey 2014 that “the spectrum of
investable property has widened to include car parks
and student housing”.
While the mainstream banks’ current lending
restrictions have a limiting effect on student housing,
leisure real estate and petrol stations, based on the
basic buy-to-let investment model, the alternative
investment that stands out is parking.
Parking space as an investment
The concept of parking spaces as an investment was
pioneered in the USA, where it is now a mainstream
real estate asset. In other regions and for some
investors, it is a relatively recent innovation in the
alternatives arena.
The parking industry generates more than £20
billion annually in gross parking revenues. The scale
of popularity and the rise of interest in car park
investments are exemplified by the global market
size, which is estimated by Colliers to be worth
$12.6 billion.
Comparison with traditional investments
Parking space investment
• requires lower minimum investment levels, as
these are now available at a much lower entry price
than traditional residential or commercial property;
• involves less on-going management and requires
very low maintenance;
• offers relatively secure returns, given the potential
to return higher income revenues, with the added
bonus of capital gains;
• offers inflation hedging;
• offers the low risk profile of an asset that can
provide a fixed income;
• provides endless opportunities for diversification
across geographical and category boundaries; and
• provides returns and valuations driven by different
forces than those influencing other property assets
such as offices, residential developments and hotels.
16
Offshore Handbook 2014
www.reimag.co.za