"There are known knowns. There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know." Donald Rumsfeld
A consistent theme of my newsletters over the past three years has been risk as it relates to the parking industry, especially for those companies that have substantial lease commitments. Some of these risks are well known – such as tenants moving or parking levies.
Parking operators in Australasia and Europe have been working on net margins of less than 10% with substantial fixed rentals. They are now in a world of pain as a result of an unknown unknown - COVID-19.
The recent release by Park24 of their financial results for the first half of the financial year (ending 30 April 2020) provide a unique insight into the impact. Park24 is the largest operator in the world and has grown since its commencement in Japan in 1971 including acquisitions over the past three years through Australasia (Secure Parking Australia, New Zealand, Singapore and Malaysia) and the UK giant NCP.
The acquisitions were covered in the November 2017 ParkScience newsletter, which covered the substantial transactional risks associated with entirely different markets and aggressive earnings forecasts in highly competitive markets. ParkScience examined known knowns, known unknowns – but did not foresee the unknown unknown of COVID-19.