- Vacancy rates for city offices and car parks have been high due to increased working from home
- Parking sharing platform Parkable estimates millions of lost revenue from vacant car parks
- Asset managers like LaSalle are now tapping into the sharing economy
We have all experienced the pain and frustration of trying to find a car park in a bustling city complex.
Too often either the car park is full, or a vacant space cannot be occupied due to being leased by a company office operating nearby.
But then Covid happened, and this all changed.
Tighter restrictions and social distancing measures forced many companies to adapt to rapidly changing circumstances. Suddenly workers, used to operating in the office, were working from home.
The Property Council of Australia’s (PCA) office market report for 2021 shows Australia’s office vacancy has hit its highest level in more than 20 years, increasing over the past 6 months to 11.7% – a level not seen since January 1997.
This begs the question: with fewer people driving to work, how are the vacant and unleased car parks being utilised?
Not much at all, according to calculations from tech platform Parkable.
In commercial property markets across Sydney, Brisbane and Melbourne, Parkable estimates that up to $761.7 million in annual revenue is being lost due to unleased and vacant car parks.
Based on 57% of leased staff parks sitting vacant, this breaks down to:
- Sydney – $371.5 million;
- Melbourne – $262.4 million;
- Brisbane – $127.7 million.
Parkable believes their calculations on lost revenue from corporate parks are an Australian first in terms of accuracy.
“Australia’s increasing office vacancy rate, new office supply coming online, more people working from home and increasing traffic congestion has produced the ‘perfect storm’ for asset managers/property owners to think outside of the square when it comes to recouping post-Covid losses – aided by tech,” said Toby Littin, CEO of Parkable.
Parkable is a park-sharing platform that allows people and companies to lease out car parks more flexibly.
Jones Lang LaSalle (JLL) is the latest asset manager – alongside Savills – to cotton on to the sharing economy to recoup parking revenue losses and drive occupancy.
“Tenants are taking reduced car park leases (not as many parking spots) to match a flexible workforce that is only sometimes in the office. However, that means that asset managers and property owners are missing out and parking space sits empty,” Mr Littin explained.
“Employers can manage their parking far more efficiently with Parkable by sharing parks with those employees who are actually driving into the office, rather than reserving them for senior employees who are working remotely.”
For example, JLL’s sites at 380 Docklands Dr (Melbourne) and 152 Hay Street (Sydney) parking lots are both managed through Parkable – allowing them to share excess parking space with tenants on a flexible (day by day basis) and share these with the public. According to Parkable, the Sydney property has generated public net earnings of $350 per month and the spaces are occupied at 70-80% as opposed to 0% under the traditional model.
In Brisbane, Hotel Grand Chancellor has many vacant car parks they now share with the public on Parkable – achieving a 90% occupancy on an average day.
