Review your carpark revenue for growth

It is common for people to feel fear at the prospect of an audit or financial review but the outcome can actually be in your favour. An audit/financial review performed by an industry professional can reveal several areas where your facility is needlessly losing money. Audits/financial reviews should be conducted at least annually and include processes, controls, reconciliations as well as ‘just the numbers’. Your condition report should also be reviewed annually to avoid costly disputes at the end of a lease.

It makes sense to know what an industry expert thinks can be improved for your parking asset. For example, by checking reconciliations and programming errors, you could uncover areas where revenue is falling through the cracks.  Don’t leave the financial review process until it is too late. Car Parks sell air so important to get on top of any potential leaks asap or it may be too late to recover. Instead, enlist the help of a seasoned professional who can conduct a thorough review and show you exactly which areas can be improved for more profits. 

“I won’t got there, the parking is always a nightmare!”

How often have you heard people refusing to visit a shopping centre or other destination because they had a bad experience? 

Now… do you know how many people say that with your car park in mind? 

Without customers, all you have is a concrete building. Your customer’s journey needs to be mapped and considered, and their entire experience taken into account. 

Consider how customers access your car park, how clean they find it, how safe it feels and how the equipment works. The ability to pay easily, navigate through the levels with ease and exit smoothly are also factors to investigate improving. 

Keep in mind: dropping the cost of parking may not always be a solution to improve customer experience. Sure, you’re still collecting rent but if the operator has to make cuts to upkeep and service, user numbers may drop. This will impact their revenue, meaning rent will decrease at the next lease renewal. 

Create an environment customers never consciously avoid and maximise profits by contacting an experienced consultant in parking facility ownership and management. 

Parking is complicated and times are changing. 

When you consider that basic economics involve supply and demand, the evolving landscape of demands needs close attention.

• Consider how new platforms like Uber and other ride sharing services already influence the way people travel and commute. 
• How will Uber Air test flights in 2020 in Melbourne impact parking? 
• Changes in car ownership figures and increasingly user-friendly public transport options will serve to reduce the number of vehicles on our roads. 
• 28 different websites that allow people to share their car spaces on a short term lease, AirBnb style
• the rising cost of parking means some businesses no longer offer it as a perk for their staff
• Work from home trend means less visitors and employers driving to the office 
• Very soon, electric vehicle drivers seeking places to charge their cars while they are parked will be the norm. 
• Self-driving cars are already here. Tesla now have a car on the market which parks itself inside the car park, while not imminent, they may not need to park during the day at all. 

Future-proofing your business needs to start now. 

Get to know what your customers want. Treat your car park as part of a community and understand your friends and competitors. Find ways to maximise revenue so you can be prepared for what’s coming next, and be ahead of the curve when it comes to customer demand for new technology.  

Consider this: you tell your current operator you won’t be renewing their contract when it expires at the end of the month. Frustrated and panicking, they contact every permanent parker to move them to a site they operate nearby, offering a discount so they can keep the revenue. 

Thanks to online bookings, they also have the emails of many of your casual customers and know their price point. Those customers will be targeted with an email recommending they park elsewhere.  

Your next operator shows up to an empty car park. They have to build customers from scratch, meaning they request a rent-free period. 

Without a clause specifying the sharing of customer information and how the operator should exit their role, you’re at risk of a dispute when your lease ends. Even if the operator doesn’t agree to sharing customer information, at least you can plan ahead when the lease is due to expire. 

The above is only one element of a car park asset lease which can cause frustration and financial loss. There are so many more things to consider. 

You must have the help of a knowledgeable professional so you can tick every box. 

Contact Parking Asset Advisory to find out more. 

The car park is a critical part of your building’s infrastructure. Similar to lifts, if it is not working, your tenants and their visitors will be annoyed and leave your property with no plans to return. 

I’ve worked in the car park industry for 14 years, mostly as a CFO. I remember one case where a car park’s garage door was continually broken. The tenant was so tired of asking for it to be fixed that they moved offices. 

The operator didn’t feel responsible for fixing the door. Neither did the owner. In the end, both suffered due to the loss of a major tenant.  

This is an example of poor groundwork. Without a clear lease agreement in place, a car park asset is at risk of not being maintained properly. This leads to unhappy customers, disgruntled operators and owners losing money.

Instead of win/win/win, it’s lose/lose/lose!  

Parking Asset Advisory works to create a win/win/win situation with your operator starting with a detailed lease agreement, proven quarterly review checklist and openly communicates with operators to avoid disputes. This ensures your asset is maintained and everyone benefits with your car park increasing ROI and value from proactive management.

How hard can running a car park be? Cars go in, cars come out, drivers pay their money. Surprisingly to most, car parks are actually very complicated businesses.

Firstly, car parks are very dynamic, never set and forget. A car park is a means to an end, not a destination, so the community of interest is the key revenue driver. Every car park must be continually monitored. 

Then there’s supply vs demand. Put the prices up and demand falls. Drop them and it rises. The trick is figuring out the balance point and optimising profits while maximising value from your community of interest. 

Thirdly, car park is unique the blanket approach with one operator does not maximise the parking asset. Every operator has different strengths and weaknesses. Two adjacent car parks will have different marketing and operational requirements. How do you know who is right to operate your multi-million dollar asset?

The industry is also facing many challenges of changing technology. With remote work, self-driving and electric cars, what will parking requirements be in 2029?

It’s a minefield. 

To ensure your asset brings value today and tomorrow, get support from the experts at Parking Asset Advisory.

Would you use a parking expert to understand, negotiate or monitor a lease for a building?  

Probably not.

So why use a property expert to understand, negotiate or monitor your car park lease?

Over 14 years working for a parking operator at CFO level, I have read over 2,000 car park leases. The finer points of every document were different because every car park and every owner has unique aspects to consider. 

When negotiating a car park lease, there is so much to cover. You need to discuss who owns the customers and how to define ‘revenue’.  

There should be clauses about equipment compliance, bank guarantees and end of lease requirements, just to name a few. 

Here’s a case in point:  An initial lease provided to an operator had 78 pages. The final lease signed was 50 pages. Several clauses were removed by the operator. The property manager and lawyers agreed because they weren’t clear on the impact of the changes. As a result, the operator transferred risk back to the owner, exposing them to potential additional costs of $1 million.  

Only an expert in car park leases can prevent your asset from being at risk! 

Contact Parking Asset Advisory for more information. 

As CFO for a multi-national parking operator for many years, I learnt about the complexities of  parking from the ground up. I have reconciled Billions in revenue, reviewed over 50,000 P&L’s and read over 2,000 car park leases.  Over time, I learnt how to improve car park value and launched Parking Asset Advisory to help owners maximise their parking assets. Now there is an expert to provide guidance for the unique and complex world of parking.  Solving your common problems I can prevent and eliminate frustrations experienced when dealing with your parking asset. With my help, asset owners experience:

- Comfort knowing their valuable asset has been independently reviewed 

- Improved communication between owners and operators 

- Relief compliance and governance boxes are ticked 

- Seamless tender process with risk minimised 

- Less disputes with clearer lease and management agreements  

- A plan for tomorrow and the technology coming with it 

- Improved asset value in short and long term  

Parking Asset Advisory is focused on win/win/win situations. This means a win for the customer, for the owner and a win for operator. Call me on 0414 018 785 to maximise your asset return.