Empty parking spaces can be turned into a steady income stream

Sarah Calvert

Sarah Calvert

In recent years we have been on a rollercoaster ride of recession-dreading and recovery-hoping. We have had it good for a long time, with record-low interest rates fuelling a price crescendo, and even Brexit struggling to dent valuations. But good old ‘boom and bust’ demands that a correction is on the doorstep and a recession in the post. There have been warning signs: investors are de-risking and diversifying, properties selling below the mark, overheating measures increasing. A market correction would entail a price decrease of as much as 12% according to the Property Industry Alliance (PIA). 

Fortunately, there is a growing array of options for diversifying revenue streams, thanks largely to new tech-enabled efficiencies that allow property companies to optimise their assets in ways that were previously unavailable. There is increasing collaboration between established players and agile start-ups. Technology providers are now offering ‘plug & play’ ways to add value to a property and thus drive higher returns. For example, there are now platforms for renting short-term office space, apps for hiring meeting rooms, and online services that focus on an often-overlooked asset: car parks. 

Parking is a £50bn market, and with an increasing number of cars on the road the opportunity is bigger than ever. Yet there is a wealth of potential that remains untapped, including empty spaces at offices and land awaiting development. It is estimated that a City of London office car park with 50 spaces can generate around £300,000 annually, which adds over £3m to the property’s overall value. Even if spaces are only empty at certain times, there is still money to be made: opening those 50 spots to the paying public outside working hours could easily be worth £40,000 per year.

So, why is everyone not cashing in on this apparent no-brainer? Until recently, car park management has been a slow-moving and highly unadaptable business. Stuck in the dark ages, its dated solutions have lacked the flexibility to manage smaller sites or short-term leases. The difference is that now the right mix of technology and data can inject some much-needed efficiency and, crucially, new ways of connecting people seeking parking spaces with the owners of under-used and, often, previously invisible spaces. 

By digitising car park management end-to-end, property owners can unlock the revenue potential of unused or under-used parking bays, regardless of shape, size, availability, location or contractual situation. Digitising parking is JustPark’s specialty. We now manage over 20,000 UK parking sites – from single spaces only available at weekends, to multi-storeys open 24/7. We fill spaces via an app that is used by 2 million drivers to book parking, and maximise revenue with dynamic pricing – which optimises tariffs to increase yield by 20% on average. A common misconception is that the property industry is resistant to change and innovation. On the contrary, we have found it incredibly receptive to a tech-driven approach. We are seeeing uptake of our service rapidly increase, with new signings ranging from small property agents to major players such as Cushman & Wakefield and Legal & General.

Income-producing assets are even more attractive during times of uncertainty – and there is a growing realisation in the real estate world that parking offers a particularly enticing opportunity. Don’t be fooled by the modest exterior. Car parks are resilient to economic ups-and-downs, delivering reliable and significant returns. When you already own the space, you’ve got nothing to lose and everything to gain.

Sarah Calvert is commercial director at JustPark