The pecking order of parking

PARKING may be an important amenity for the retail sector in the city, but private parking is a major selling tool for commercial space across Perth.

A car bay for a premium city office space costs up to $450 a month, excluding the Perth Parking Levy and GST.

Colliers International executive director Imran Mohiuddin said car parks presented valuable opportunities for building owners in terms of data collection.

“I think as property owners come under increasing pressure to show better net returns they’ll come back to this issues with a new technology approach,” he said.

“There are opportunities to make money from car bays.”

Mr Mohiuddin said building owners could collect valuable information about the use of car bays to maximise their earning potential.

In shopping centres there were opportunities to track who was using the car bays and how much they were spending.

“What’s important is the in-formation you can get out of it,” Mr Mohiuddin said.

Industry analysts agree offices that can’t offer parking are more difficult to sell to potential tenants.

Recognising the importance of parking space, the developer of Woodside’s new headquarters in Perth, Hai Sun Hup, lobbied the Department of Transport to increase the number of car bays in the development.

A development’s financial viability can often be influenced by the provision of parking.

CB Richard Ellis director of valuations Stewart Nuttall said buildings that couldn’t offer car parks often found it difficult to secure tenants.

“The rate for car bays has plateaued in the last 12 months,” he said.

“It has got back to the historical peak of between about $430 and $450 [per bay] a month. This matches the previous peak in 1990.”

With the rising cost of private car bays in the city, some firms include parking in an overall salary package for staff.

The increased cost of bays has prompted some city tenants to push part of the cost of parking in the city back onto employees.

In some cases this has had the effect of discouraging people from driving into the city, Mr Nuttall said.

“I think we are seeing more cases where companies are looking to package-up car parking as a component of a salary deal as car bay rates increase,” he said.

“But if you don’t need a car for work I guess you’d be quite happy

to take an extra $5,000 in pay.”

Car parks are a big feature in the battle to secure tenants, according to one industry analyst spoken to by WA Business News.

The rate of car bays for new developments in the city ranged from one bay per 130 square metres up to one bay per 200sq m of office space, he said.

“Once you start getting outside that realm it gets more difficult to lease the space,” the spokesman said.

“Perth is very car focused and that’s not really going to change in the near future.”

The cost of bays in the city ranges from about $350 at the lower end up to around $450 – exclusive of the levy and the GST.

“We’ve seen a huge growth in the past 10 years,” Colliers International research manager David Cresp said.

“It crashed in the 1990s and at that time it was between $150 and $200.

“But we’ve seen very strong growth since then.”

He said the growth rate was likely to stabilise in the future.

“Looking forward I think you’ll get CPI and a small margin,” Mr Cresp said.

“ I think we’re now starting to get to the point where business is starting to baulk at it.

“And they’re looking at methods where the burden of parking can be passed on to staff.

“Potentially you then get some people reviewing their decision to drive.”

The cost of private car bays in the city is augmented by the licence levied by the State Government.

The Perth Parking levy was introduced in 1998 at a cost of $70 a bay.

It’s currently at a level of $150 a bay, which is collected for approximately 27,000 bays in the city.

The revenue from the Perth Parking Levy is utilised to fund the Central Area Transport (CAT) buses in the city.

The parking levy is unpopular in the property industry, where it’s seen as a revenue grab by government.

Property Council executive director Joe Lenzo said it was unfair that one sector of the city was hit to fund the CAT buses.

In terms of office tenants, parking under the building or nearby is important, according to Lease Equity director Jim Tsagalis.

“A building without parking sells for substantially less,” Mr Tsagalis said.

For retail property in the city the issues around parking are focused on loading bays.

“In terms of retail, tenant parking is not as important,” Mr Tsagalis said.

“For them, certain loading facilities become important.”

He said that, when Woolworths supermarket looked at moving into the city, it had to look at loading bays.

To ensure stock was on the shelves the supermarket had to secure loading bays to take delivery of stock.

“It can cost them money because the trucks can only come at certain times,” Mr Tsagalis said.

“On the Hay Street Mall you can load up to 9am, if you don’t get in then you’ve got a situation where you don’t have stock.

“It’s also an issue with residential property.

“In a city like Perth a lot of the infrastructure is not in the CBD, so a property without a car bay doesn’t attract as much.”

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