BLOG POST – Enabling Smart Mobility – by Ruud Roosen, Partner at Primevest Capital Partners
There is a persistent misunderstanding about the future usefulness and necessity of off-street car parks. Many think we will be able to do without them in a number of years. They see a self-driven, automatic vehicle picking us up and dropping us off at our destination and then continuing on its journey.
Nothing could be further from the truth. Even self-driving privately owned vehicles pose a challenge for road capacity and may still cause congestion in our cities when not parked in the direct vicinity of the owner’s destination as these vehicles then have to drive back out of the city and drive back in later on to pick up its owner doubling the traffic flow in a city. And the need for a private car, and independent mobility, will not decrease significantly. Certainly not for those out-of-town dwellers, who want, or need, to visit a city centre every now and again. Not everyone will wish to wait for a self-propelled Uber, preferring to leave when it suits him or her, or the family. Covid-19 also shows that the need for our own ‘personal mobility space’ is not necessarily a thing of the past and will continue to have a role in the future.
View from the street
But there is something else going on. Something that will determine the future of parking to a much greater extent. And that is reducing the ‘functional view of the street’ in order to improve the quality of the public space. Increasingly cities are doing this. On the one hand by increasing the costs of on-street parking and on the other hand by reducing the number of parking spaces available. As a result, vehicle users will find their only choice is off-street car parks. Look not just at Amsterdam, but also Oslo.
As a result, the use of parking garages will become optimised simply because spaces are increasingly scarce. Even if the number of vehicles in city centres decline, measures taken by local authorities to reduce on-street parking will make car parks essential in order to guarantee the accessibility of inner cities for everyone.
City authorities are increasingly understanding that car parks play an important role in inner-city infrastructure and so ‘smart parking’ is becoming more commonplace. This means that a potential user is informed ‘real time’ about the nearest available parking space, the cost and alternatives. In addition to a better customer experience, this prevents traffic searching for spaces, which forms a significant part of total inner-city traffic movements. Smart parking reduces CO2 and particulate matter emissions.
Smart parking can also be used to achieve greater flexibility in parking tariffs depending on whether there is more or less demand for parking, something that is already being applied on a smaller scale by parking operators. All these applications are based on the integration of parking into the infrastructure of a city, made possible by new technologies such as the Internet of Things in combination with 5G. Primevest is responding to this by means of its ‘Smart City’ product which integrates 5G techniques into lamp posts, thus creating a dense network of antennas which deliver data to the user even faster.
The traditional role of garages as a ‘warehouse’ for cars will change in the future, creating greater dynamism. Car parks will increasingly become ‘mobility’ hubs. Adding value will be central to this, whereby the customer will be offered additional services that can range from charging an electric car to online ‘pick-up’ services.
But that’s not all. Where there is room for other functions besides parking, we will see that car parks are also being used as ‘last mile’ delivery centres, where storage space is integrated and air-conditioned zones can be integrated, for example, for the catering industry. The preparation and distribution of delivery meals from customised spaces in parking garages close to the customer is something that is already happening. The last mile can then be bridged by less polluting electric-powered vehicles. Even rooftop spaces are now being used by parking operators as temporary event locations.
• Car parks will have to cope with rising demand for vehicle spaces due to the growing pressure on public space;
• Car parks will increasingly be integrated into urban infrastructure;
• Car parks will transform into smart mobility hubs.
At Primevest Capital Partners we believe in this future for car parks and see this asset class as an important addition to the portfolios of real estate and infrastructure investors. For 15 years we have invested in this asset, on the back of strong fundamentals which essentially have remained unchanged: scarcity of product, which is not easy to substitute and provides stable and long-term income streams. The future role of car parks in enabling smart mobility in our city centres is one fundamental that was not included as an investment-criteria when we launched our first fund 20 years ago, it is now.