+33(0)173101995Parking is a profitable asset that attracts investors.
Garage, box or open parking, parking spaces can be an excellent investment for investors seeking diversification. Especially in cities where "surface" parking is scarcer. But the location’s cost remains essential when determining the price and rental return. The Chamber of Notaries therefore recommends favouring large conurbations’ city centres where there are less and less parking spaces. In addition, a closed and secure parking space will be easier and more expensive to rent. If a parking space costs on average €21 400 in France, prices can vary considerably from one region to another. In Paris, for example, prices vary between €10,000 euros €75,000 euros depending on the district. "The elimination of on-street parking spaces and the increase in fines for non-payment of parking are creating an increased demand," stress rental professionals.
Car parks: an attractive rental return
Rents are also wide ranging in price, between €75 and €500 euros per month, depending on the shortage of supply and the location of parking. With an average yield of 5% in 2017, the profitability of a car park is much higher than that of real estate products such as apartments. In addition, the simplicity of rental management is an asset for car parks. Private car parks can be operated under full ownership or under a commercial lease but also under a service management mandate. Co-ownership and maintenance costs are very low. In terms of taxation, the landlord must simply declare the rents collected on his rental income. They must pay the property tax if the garage is an annexe of the dwelling. Transfer costs, on the other hand, can lead to significant notary fees. As notarial fees are degressive, they are proportionally higher for small amounts.
A change in car park management methods
Public policies that have significantly reduced the number of parking spaces on the roads have led to significant changes in the management of car parks. Although this activity is still very profitable, local authorities, who are the main applicants for car parks, prefer to entrust their management to private actors (55% of the market), often from the public works sector, within the framework of concessions. The latter build and operate car parks through a public service delegation contract. Communities choose the semi-public company (SEM, Société d’économie mixte) for 28% of them. Only 18% of cities still opt for the management mode. Actors such as Indigo (formerly Vinci Park), the European leader in parking, are investing in this market that is less sensitive to economic conditions. Other operators such as Urbis Park (Transdev group), Effia, Autocité, Q-Park or Saemes are also very present on this market.
Parking lots and the emergence of new services
Parking remains a major challenge in preserving the attractiveness of cities and business districts. The lack of parking spaces is indeed the 2nd criticism that the French cite within their neighbourhood. According to the latest studies, the time lost in searching for a parking space is around 70 million hours per year. To respond to this problem, operators are looking to expand their offering. Among the best known, ZenPark, which manages more than 420 car parks in France and Europe, offers, thanks to a smartphone application, a whole range of private car parks (hotels, residential landlords, companies, car park operators, etc.), geolocated and updated in real time. Hotel chains are particularly coveted for their underutilised car parks. Thanks to this solution, motorists can reserve parking at a 25% to 60% lower price in advance.
The uncertain future of the parking market
However, this market may have its limits. The political will of cities to restrict car travel in favour of public and “soft” transport such as cycling can lead to an increase in the vacancy rate in car parks, particularly in Paris. A trend that investors have anticipated: parking prices in the capital are no longer rising. According to the latest figures put forward by Paris notaries, the price of a car park now averages €24,500, down 2% in 2017 (from January to October). The inner and greater suburbs, however, benefit from this restrictive intramuros policy. The cities of Montreuil, Aubervilliers and Sarcelles recorded strong increases in car park prices. Hauts-de-Seine and Yvelines are the most sought-after departments with prices of up to €50,000. In the provinces, the situation is almost equivalent. A medium-sized city like Rennes recorded a 14.7% increase in prices to 19,500 euros, while the city of Lyon posted a 4.4% increase to € 26,300.
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