Trends that impact the car parking sector will influence the rentals paid by car park operators of Australia’s commercial property, says Wilson Parking’s chief executive officer Stephan Wuffli. What are some of those trends and how can commercial landlords respond?
Australia’s largest car parking operator, Wilson Parking maintains around 40 per cent of market share, is found in basements of office towers and provides public CBD car parking around the nation.
“We contribute around $180 million a year in rent. Outside government, we are one of Australia’s largest commercial tenants. The ability to rebuild parking revenue will support future property values; and this makes us an important but often undervalued tenant,” Wuffli says.
With the impact on commercial property tenants so closely aligned with parking, Wuffli is keen to start new conversations with property owners and managers about the changes ahead.
“Covid has put many of the horizontal challenges facing our industry on our doorstep now – and we need to respond. We have to assume and act like these trends are structural, not transitional to ensure we are prepared to meet our customers changing requirements.”
Wuffli points to several key trends that are playing out across Australian cities. The first is public transport aversion. According to the Australian Bureau of Statistics, one in seven Australians used public transport in March 2021, compared with nearly one in four before COVID-19 restrictions began in March 2020.
“A lot of people don’t want to catch public transport, and they are turning to their employer to make it easier and more efficient for them to get to the office.” Wilson Parking has been approached by several large corporate occupiers looking for solutions that maximise parking allocations, and Wuffli expects this to continue.
The second trend is workplace flexibility. The number of Australians working from the office has bounced back to pre-Omicron levels, according to the Property Council’s latest office occupancy survey. But Reimagining our Economic Powerhouses, a report published by the Property Council and EY last year, found 3.3 days in the office is now the average preference.
Parking statistics have mirrored workplace occupancy data on a state-by-state basis, Wuffli notes. The traditional contracted monthly parking segment has decreased by 28 per cent on pre-COVID levels as parkers take up more flexible products. “More CBD employees are choosing Tuesday, Wednesday and Thursday to come into the office. We are acting as if this could be a structural shift and are reimagining our channels and products to suit that shift.”
Then there’s the growth in online channels. Wilson Parking has seen online bookings surge by 262 per cent since March 2020. Three quarters of Wilson Parking customers say they are now more likely to book online in advance.
“People no longer want to pull a ticket out of a machine and stand in queues with other people; they want to plan, book and pay easily online or in app, close to where they want to go and with pricing options to suit their needs of the day.”
The Covid era has been challenging for parking operators as tenants, Wuffli observes. “Commercial buildings that were 90 per cent occupied are now sitting at 15 to 55 per cent of pre-Covid levels, according to Property Council office occupancy data. Like most retailers in the CBD, we are doing our best to invest in the right products and channels to stabilise our business, which will then in turn stabilise our rents.
“Everyone is looking to come out the other side of this crisis, but there may be no other side to these trends. We need to build resilience in our businesses – and we can only do that with a long-term partnership approach with our landlords,” Wuffli concludes.
Read more on Wilson Parking Australia Insights and discover new flexible solutions targeted at the changed the commute.