Just a car park?

Colin Chan, Director, Asset Repositioning at JLL reflects on the future of urban parking and the strategic development opportunity hidden in plain sight

I believe car parks were part of the solution for our towns and cities across the UK in the last century. With a bit of work, I also believe that they can be a big part of the solution for the next century in tackling social, economic and environmental issues we face ahead of us.

For those reading, who like me, own a combustion engine vehicle and have yet to make the transition over to EV, the realisation I'm sure is that this is likely to be your last petrol or diesel engine car that you own. The SMMT forecasts that from the height of the market in 2016, new car ownership across the UK is likely to fall by 26% by 2030. This decline – if persists – will ultimately translate into lesser cars on the road as existing cars retire and the population transitions to EV’s and other more sustainable vehicles.

Subsequently, it’s likely that we’ll see a  knock-on effect on the future demand for parking spaces. Added to this are the myriad of factors impacting car ownership and the desire or need to drive – urbanisation, rising cost of living, digital convenience (ride share apps, online retailing etc) and the environmental awareness from the Gen Z and Gen Alpha generation.

Across the UK, there are over 20,000 parking facilities. The bifurcation between resilient and surplus assets – a trend that has already happened in many other commercial real estate sectors – is likely to materialise to car parks too. This means suboptimal assets could be subject to higher risks of decreasing occupancy, and loss of income and value in the medium to long term. Meanwhile, vacant, underutilised car parks can often be the breeding ground that fosters anti-social behaviour, creating a negative halo effect on the local neighbourhood.

Built on strategic land, most car parks are well located for many alternative uses that would unlock and enhance value. But how can we identify resilient car parks from surplus ones? And how could we unlock and enhance land that are currently occupied by surplus assets in order to tackle economic as well as social and environmental issues? 

Key points:
  • There is an oversupply of car parks and a decline in car ownership meaning we’re likely to see a fall in demand for parking spaces.
  • Car parks are often bult on strategic land suitable for alternative uses which would enhance value