helping Managers and Owners improve their parking asset value

ARE mistakes reducing your Car Park's profit and valuation?

The challenge of opposing goals

The Owner wants the highest income for their commercial real estate, the

Customers want the cheapest parking and the Operator is stuck in the middle wanting to pay the Owner the lowest rent at their car parks and charge the customer the highest price – with as little risk as possible. These misaligned goals between Owner and Operator can result in a challenging relationship, with a lack of transparency at the very core.

Who has time?

Everyone in the parking chain is time poor. The Commercial real estate Owner may have billions under asset management, with car parks just a small part of the portfolio. Operators often run hundreds of sites with minimal front and back office staff. With such limited resources available, how can you ensure your parking asset gets the attention it needs to deliver maximum returns? 

A Car Park, is a Car Park, is a Car Park ...?

It is often assumed that all parking at Commercial Real estate and Operators are the same. But here’s the industry’s Golden Rule: no two car parks are the same. Even two assets within 50 metres of each other can have completely different revenue drivers and market considerations. Additionally, Operators also have differing strengths and weaknesses. Success at one car park does not automatically mean they are the right Operator to manage your other assets. 

The Contract: signed, sealed, delivered?

How often is your contract reviewed to ensure your asset is being maximised? Can you be sure the Operator is duly complying with the contract requirements for your car parks? Has their bank guarantee been updated? Have annual insurance details been provided? Are maintenance agreements in place? Is financial and statistical information being reported in a timely manner which is in accordance with the contract? Without these backstops in place, you could be throwing away thousands of dollars from passively managing your parking contract and value of your commercial real estate

Lack of parking expertise

Parking is a specific commercial real estate asset category that demands specific parking know-how. Some Parking Owners may choose to use in-house parking resources while tendering, negotiating and managing their parking contracts – primarily as a money saving exercise. Whilst they are experts in commercial real estate it is rare they have direct parking experience. As a result several commercial real estate aspects and parking nuisances are missed which may lead to lost parking opportunities, legal disputes and increased commercial real estate risks at their car parks

Maximising rent – a costly exercise

As a Fund Manager you are responsible for the maximising commerical real value and so obtaining maximum parking rental must be considered as part of a win/win/win commercial real estate strategy when working with your Operator. If you fail to document this in early negotiations the Operator will often pass costs on to Customers – or cut back on expenses such as cleaning, cash collection and staff resulting in a negative customer experience, drivers park elsewhere which means less revenue and the spiral of descent continues. All that is left is little profit in an empty concrete building which can't be called car parks

WE EXIST TO SOLVE YOUR PROBLEMS

Problem 1: maximising your asset

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Problem: maximising your commercial real estate asset at lease renewal, lack of in-house independent parking expertise, lack of independence when receiving advice from an Operator, lack of time so Owner takes easy option of rollover which usually doesn’t optimise their car parks assets



Solution: we offer a complete and thorough renewal package to maximise your returns and minimise your risks and if required, manage transition between Operators

Problem 2: responsibility of asset mgt

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Problem: burden of car parks compliance, lack of care, lack of review, unaware of risks and lack of time


Solution: Continual Review program: a residential rental property which is valued around $500,000 has a regular review to ensure the tenant is looking after the asset however your commercial real estate parking asset which is valued more than $20,000,000 does not. We solve this problem completing a comprehensive financial, contract, operational, marketing and strategic review and report in a one page Board ready document 

Problem 3: finding a parking specialist

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Problem: who to contact when looking for parking expertise? 


Solution: this is our why. We exists as we are experienced and passionate about car parks. We have insider knowledge and services cover all aspects of parking including but not limited to contract review and compliance, equipment advice, parking levy review, competitor analysis, strategic parking advice, OH&S and safety anaylsis, feasibility and traffic surveys, financial review, audit and contract negotiations. All parking needs for commercial real estate

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Cars methodology: 4 steps to high performing car park asset

Right Contract, insightful Analytics, Review process, optimal Strategy.




Contract: Whether it is negotiating car parks tender or reviewing an existing parking contract, we read and clarify the rulebook for interaction between the commercial real estate Owner and their Operator. This identifies quick wins, concerns and risks, and sets up the framework (play book) for the car park.


  


Analytics: are then used to assess the Car Park performance through six different lenses: 


Operational performance, Competitors activity and pricing, Marketing and Data Analysis, Community of interest, Compliance and Finance  





Review and Report:  The analytics are reviewed and summarised into a one page easy to read report. A regularly review process is crucial to ensure the asset performs to expectations and the Operator is performing to the Contract with governance and transparency. 





Strategise:  What is your Strategy? Where are you positioning your Car Park in both the short, medium and long term? For the short term you may be looking at price, yield and customer satisfaction, as well as operational and financial aspects. In the longer term how will technological advances and other trends affect your business? Will your asset is still relevant in 10 years time?  

Services offered:


Services cover all aspects of parking including: 

· tender process

· contract review and compliance

· audit or financial review

· operational assessment

· contract negotiations

· quarterly reviews

· competitor analysis

· parking levy review

· equipment analysis

· traffic engineering and flow

· equipment location

· feasibility and traffic surveys

· impact assessment

· wayfinding

· future parking directions

· community of interest assessment 

· OH&S and safety analysis

· Benchmarking 


Find out more

Know your basement?

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What exactly is happening below the surface? It’s more complex than you think:

Contract

In one parking contract negotiation, the Operator negotiated 28 pages (35%) out of the contract for the commercial real estate. Some clauses weren’t important but others were critical. This exercise could potentially cost the Owner over $500,000 from clause changes around levies, insurance, maintenance, make good, ownership of data, audit, end of contract requirements, minimum service standards, reporting requirements and the definition of revenue. Car parks are unique and each has different requirements to be addressed in the lease


A publicised example of a derailed contact negotiation is the case of Secure Parking Pty Ltd v Woollahra Municipal Council [2016] NSWCA 154 (Secure Parking). The only winner in this lengthy contract negotiation was the lawyers. In the lower court, “Ball J held that Council was entitled to terminate the contract for repudiation when Secure refused to acknowledge the existence of, or perform its obligations under, that agreement, and assessed damages for loss of the benefit of that contract at $5,339,592, plus the cost of undertaking a second tender process at $122,829.” (www.maddocks.com.au). This was later overturned in the Court of Appeal and the council was required to repay the money plus interest.

Analytics

Consider this: An Owner of commercial real estate installs car parks equipment at a Capital cost of $500,000 at the beginning of the contract. The contract states that the Operator must appoint an independent third party for quarterly maintenance for their parking equipment. This is overlooked and at the end of the 5 year contract, the equipment needs replacing costing the Owner a further $500,000. Had a quarterly review been in place the Owner would have gained a further five years life from the equipment before replacement was required. The additional $500,000 expense excludes unknown lost revenue from faulty equipment failing to process customer payments.

Review and Report

A regular parking review and reporting process is critical in maximsing your commercial real estate asset. One Owner of multiple car parks from a large fund did not pursue unpaid rent – which was overlooked by Operator for 10 months due to human error. In another instance an Owner did not send the percentage rent invoice for nearly $1 million – so no payment was made. The contract ended and a new contract was entered into with no invoice ever sent. Without agreed regular review and reporting in place, your car park could be missing out.

Strategise

Large Operators have hundreds of car parks under management often using one strategy for all car parks. For a traditional business this makes absolute sense, but for Car Parking it doesn’t work. Remember the Golden Rule? No two car parks are the same. Each need their own individual analysis, strategy and execution. An Owner needs to take active strategic responsibility for their asset rather than rely on their Operator to provide the best strategy for their expensive parking asset at their commercial real estate locations

Next Step

Contact us for a free coffee and chat how we can assist you optimise your parking asset value

About Us

Allison Yeoland

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Allison Yeoland is a Fellow of CPA, Graduate of Australian Institute of Company Directors and former CPA NSW Divisional Councillor. She worked with a major international parking operator for 14-years, predominantly as Chief Financial Officer integral in growing the business from 50 to 580 car parks. Allison’s team won the AFR DealBook award for Finance Team of the Year and she was a finalist in the Telstra Business Women’s Awards. She has perused over 2,000 car park contracts, reviewed over 50,000 car park Profit and Loss statements and reconciled Billions in parking revenue. Allison has travelled to 86 countries, is a proud Mum to two cheeky boys and represented Australia in Hockey.  

FUN, TRUST, PAY IT FORWARD

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Our key values are: FUN, TRUST and PAY IT FORWARD.  


We believe that every business has the power to change lives by integrating giving into its everyday activities. 


For every email we send to our clients, we provide a child in Cambodia with access to reading material so they can educate themselves through the B1G1 (Buy One Give One) Business for Good community that works on the ‘Pay It Forward’ principle through focusing on parking at commercial real estate car parks

WHY WE EXIST?

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We exist to help Owners/Managers maximise their parking asset, because we have the insider tips and tricks and we know car parks best especially for commercial real estate.


As an independent expert we work to create a win/win/win for everyone as that is the way to maximise your parking asset. 


A win for the Customer so they park at your asset

A win for the Owner knowing your asset is maximised A win for the Operator so they look after your valuable asset. 


Our services exist to solve your parking problems, some of which you are not even aware you have.

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NEXT STEP: contact us

We love our clients, so feel free to contact us at any time about parking at commercial real estate car parks

Parking Asset Advisory

info@parkingassetadvisory.com Allison Yeoland +61 414 018 785 Peter Seales +61 423 782 058