Park Science

Crisis? What Crisis. No V shaped recovery for parking.

Crisis? What Crisis. No V shaped recovery for parking.

The analogue reader may remember the 1975 Supertramp album, which was rushed out after their 1974 success, Crime of The Century. It was a salient lesson for the band in moving too quickly to capitalise on their new found success. Unreasonable haste is the direct road to error.

The April newsletter had almost 5,000 downloads and created a lot of discussion about the impact of COVID-19 on parking, with a focus on Australia. We are now into the second month of lockdown, the financial pressures are mounting on the operators and there is an impasse on a solution for financial relief between them and owners.

To understand the basis of this, we need to delve into the dark arts of modelling and the assumptions they are based on. The owners are using a “V shaped” recovery to determine the impact and relief package. Operators are looking at some form of L shaped recovery. ParkScience believes it will be somewhat different, which will prove highly problematic for anyone without a strong balance sheet and (in some cases) support from their parent.

I will now set out the two views and provide commentary as to why we are likely to see a new form of recovery in the market.

V Shaped Recovery  

This centres around a quick relaxation of the various social distancing and quarantine restrictions we are now seeing with commercial offices and retailers promptly returning to post COVID-19 functionality. Additionally, all day parking volumes and rates will increase (above pre COVID-19 levels) as commuter travel by private vehicle will be seen as safer than public transport. ParkScience agrees with the perception issue and the possibility of volume increases. However this will not be nearly enough to offset the far larger downside forces.

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COVID-19 and Parking

Parking bays

In this edition we will look at the unprecedented and sudden downturn in volumes across carparks in Australia and how COVID 19 will fundamentally change the commercial landscape for parking operators and owners.

Authorities are trying to flatten the curve of infections to allow our medical system to cope. Isolation, quarantine and social distancing are important elements in containing the epidemic. We have already seen cancellation of all major sporting events and social gatherings limited to two people. Pubs, clubs, hotels, casinos and all convention and exhibition centres are closed. International travel is non-existent and domestic travel limited.

Qantas has laid of 20,000 workers, Virgin another 9,000 and the entire retail sector is on the verge of a complete shutdown as Myer prepares to close all its stores (with another 10,000 staff laid off) following Premier Investments and Kathmandu/Rip Curl. Corporate Australia is on a massive cost cutting exercise and parking is not immune.

You want free parking – you have now got it at Melbourne Airport! This follows on from Perth and Brisbane City Councils instigating free short-term parking in several areas. Perth City Council has also closed three carparks on the weekend. Brisbane Council has turned off 8,000 parking meters, will not issue fines and will offer $5 all day parking at its two main CBD car parks.

All of this has happened in less than a month – and we are only starting to see the impacts of rising unemployment.    

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Parking Industry at a Crossroad

The parking industry in Australia is at a crossroads.

Where to from here?
The Australian market is somewhat unique, with A REITS owning the majority of the commercial carparks in capital cities and their secondary markets, including North Sydney, Parramatta and Chatswood. They usually require a lease from an independent entity to conform to tax laws relating to trading trusts.

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WeWork

wework

Following the last newsletter on history never repeating, WeWork’s IPO has been cancelled and SoftBank have had to inject further funds into the business as investors shied away from the top line growth strategy.

It has been an interesting rollercoaster for We Work since its commencement in 2012 with the valuation moving to $10 billion in 2016, then to $42billion in January 2019 and now down to $8 billion – which still looks very optimistic for a company that lost $900 million in the first half of 2019.

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Warrick Lane Carpark

Lighting and signage

One of the most interesting carparks we have worked on recently is the redevelopment of the existing Warrick Lane, Blacktown open air carpark into a mixed use commercial and public open space transformational project with Blacktown Council taking on the role as Master Developer.

Development will be staged with Council providing the initial infrastructure, including a 473 bay 4 level underground car park, a 4-storey flanking building on the eastern edge and a 1 level building on the western edge – with scope to increase to 4 levels.

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Westpac Technology Trial

Car Park Entry

Westpac are in negotiations with BaseUp for the implementation of their cloud-based technology for Westpac staff parking.

The updated BaseUp system utilises a geo fenced area immediately adjacent to the entry or exit reader that allows a smart device to communicate to the reader to activate the gate, without a customer having to press a button on their app to open the gate. Essentially a hands-free operation.

The geo fence around the gate prevents the signal from the app being detected from an adjacent gate – for example where an exit and entry gate are side by side.  From a user experience, this is a significant improvement on what is being offered in the market at present.

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Prop Tech

Prop Tech

This is a new term describing the transformation of the property industry – not just parking. Proptech is the convergence of property and technology. It is about leveraging new technology into the property ecosystem.

Click on the link below (subscription required) if you have not read the recent article by Folkestone's Adrian Harrington in The Australian on prop tech and how it is changing the way landlords and tenants interact – being driven by demands of tenants for flexibility and increased efficiencies in their use of space. https://www.theaustralian.com.au/business/property/proptechs-the-way-of-the-future/news-story/3a524669d319c338d5fb0ac610a56a63 

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Eureka moment for ParkScience

Melbourne CBD

The majority of my work centres around carparks, their design and access systems.In recent times a new string has been added to the bow, with ParkScience engaged by Wilson Parking to obtain development approval for a two level 4,000m2 office to be built on top of the successful 602 bay Eureka car park adjacent to SouthGate in Melbourne. 

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History never repeats

Wynyard exit tunnel

I tell myself before I go to sleep...

Neil Finn wrote these words in 1981 on that great album Waiata, which I have recently rediscovered. Aptly the B side was “Holy Smoke”.

So, what has this got to do with ParkScience and the weird and wonderful world of parking you ask. It had me thinking about my early days in parking, moving to Sydney in the heady days of 1988 before FBT, Parking Levies and mobile phones. 

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Changing of the Guard

He that wrestles with us strengthens our nerves and sharpens our skill. Our antagonist is our helper. – Edmund Burke, 1790

It was a little like a John le Carre novel – George Smiley meeting his old nemesis Karla after the end of the Cold War. As to who is who, I will leave it up to you to decide.

I met David Knight (Group General Manager Secure) recently in Brisbane to catch up after learning he was leaving Secure Parking, having started some 33 years ago. He was employed by Garth Matthews and expertly trained in all the dark arts of parking – with a flair for development and negotiations.

He rose from a sales role to be Group General Manager and was instrumental in the Secure brand maintaining its pre-eminence in the Queensland market.

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No snorkel required

Canal conversion

Warehouse conversions are commonplace around the globe for residential and commercial property – but this must be a first.

Around the corner from my hotel in Amsterdam was a canal conversion – that’s right – a canal that is being converted into a carpark!

The De Pijp district was built in the late nineteenth century with narrow streets and no cars. Whilst the Dutch love their bikes (and no carbon fibre or lycra here) they also want their cars. So ZJA Zwarts & Jansma architects have come up with a great solution that provides parking for 600 cars and 60 bicycles under a canal. 

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AI Park

AI Park

Artificial Intelligence and parking?

This was not even a blip on the radar five years ago. AI are in a similar field to ParkNow with a variety of white labelled products for smart devices and in car displays. They have a substantial presence in Germany with a proven product. However, the product that caught my eye was for on street parking or open-air parking lots. A single sensor can cover up to 30 spaces and is mounted on a lamp post and can be solar powered. It has a cloud-based engine that can provide extensive predictive and useage data to a central location or to users through smart devices.

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