ROD Parkings: an attractive alternative asset class


With many investors seeking stable and long-term returns in alternative asset classes, Rodschinson sees a growing number turns to the parking space segment. This relatively non-traditional real estate opportunity is driven by continued growth in car increases, while a push for greener cities has put pressure on the supply. As a result, parking fees and therefore rental income is on the rise.

Rising use of cars

A general trend has emerged in most key markets around the world: the number of cars per household continues to rise, with more and more vehicles hitting the road every year, particularly in fast-developing and emerging economies such as China, India, Brazil, South Africa and Indonesia. But also in Europe and North-America, steadily growing populations continue to buy more cars per household.

Supply pressure

While the uptake of cars continues to grow, local councils and authorities have increasingly put owners and operators of car parks under pressure. Due to sustainability, environmental concerns and effective use of space in rural areas, the supply of available and suitable car park properties have faced enormous challenges in recent times.

Rental increases

As a result of the increased uptake of vehicles with, at the same time, dwindling car park opportunities – particularly in busy urban areas – operators of car parks increasingly charge higher fees. This has led to car parks increasingly turning into lucrative propositions: Rodschinon’s global team of car park experts have worked with dozens of clients to strike lucrative rental contracts for their car park assets.

Individual car park spaces

The market has experienced such a demand in recent years that individuals have started to purchase individual car park spots. For example, with an investment of between €20,000 and €30,000 in most European cities, for a lease of six to eight years, investors often obtain a guaranteed rental yield of around 8%. These results have led to an increased interest in the market, with more and more fresh capital flowing in.

Location is key

Like most property investments, identifying the right location is vital. Places where demand for parking is at a premium, largely in urban cities with certain weather conditions, have turned out to be extremely popular investment spots for parking assets. Great examples are the hot summers of Madrid, rainy Glasgow or the freezing winters in Moscow.

Investment with caution

While a car park investment seems to be very straightforward, Rodschinson has identified a number of pitfalls that clients should take note of. Those who are interested should proceed with caution. For example, local planning permissions, permits and future building plans need to be scrutinised properly. Moreover, our global team of experts always works with clients to make a plan for when the guaranteed income period runs out.

Long-term opportunity to diversify

Despite the mentioned pitfalls, our experts are highly experienced in identifying car parks as lucrative long-term opportunities. Many of our clients have successfully invested in car park properties in the past, as they are often a reasonably safe way of diversifying and spreading out risk within a portfolio.

Get in touch

Since the car park property sector is one of the most exciting alternative real estate ecosystems within CRE, with our team representing dozens of investors, developers and other committed players, our team would be thrilled to tell you more about their past investment strategies and client proposals when it comes to vehicle space and car parking.

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