Foreign invasion transforms UK parking
Copyright: David Lawson
Published: Property Week 2007
If anyone is a natural candidate to dominate parking, you might expect it to
be car obsessed Americans. But this is one sector they have failed to conquer.
CPC, the world’s largest operator, has just retreated from Europe
after struggling to reach the top spot. But foreign interests still rule the
The UK arm of a German-controlled chain jumped to second
place behind NCP after buying CPC’s business in Europe
and effectively doubling its holdings in this country. Ironically Apcoa sprang from US roots. It comprised a series of affiliates
in several countries until these won independence more than 25 years ago. They
were gradually consolidated under German control as Apcoa grew into Europe’s
The latest chapter came with the Euro885m sale to French
investment group Eurazeo early this year. European
turnover is expected to reach Euro570m this year from more than 850,000 parking
spaces across 15 countries. Almost a third of Apcoa’s staff is in the UK, giving an indicator of the importance
of this arm. It recently took over the 900-space Modus car park in Wigan for a rumoured price of more than £1,000 per space.
Morley also chose the company to operate its futuristic £11m multi-storey in
Dutch based Q-Park is number three in Europe, with 525,000 spaces in more than 4,000 locations.
Its foothold in the UK
came from acquisition of Universal Parking from Town Centre Securities for £16m
in cash and repayment of £20m of debt in 2001. Net assets of Universal at that
time were an estimated £1.1m and pre-tax annual profit around £1.6m. Latest
figures for the international group show net profits of Euro40m.
Q-Park has concentrated so far on specific UK
centres, aiming to dominate local markets. It is big in Glasgow
and Leeds, and recently paid more than £11m for the Midland car park in Sheffield. The UK arm of this international conglomerate pulled
off the biggest commercial property deal in the country when it agreed with
Grosvenor Estate in 2004 to lease and manage more than 2,000 parking spaces
around the Paradise Street
redevelopment in Liverpool.
Vinci is rumoured to be in line for two large shopping centres, adding to
more than 40 existing contracts. The group includes construction giant Norwest
Holst, giving an in-house ability not just to manage
but design and fit out major projects, such as the famous Mayfair car park under
London’s Park Lane. But the bread and butter come from a multitude of less
glamorous projects. Last year Vinci invested more than £4m building a decked
car park at Broadgreen
as part of a 15-year Public Private Partnership contract with the health trust.
A modular design future proofs the project by enabling addition of an extra
deck of parking when required. Vinci has the firepower to finance such schemes,
with more than £60m a year flowing in from parking receipts and record £32m
pre-tax profits on a turnover of £632m in 2005, the latest published accounts.
Demand from institutions and private equity for alternatives to a rapidly
weakening conventional property market is moving parking onto the same stage
as infrastructure such as road tolls and airports. Mission Capital,
one of the brightest new stars in property, run by the equally bright Emma Sinclair,
saw the opportunity a couple of years ago, by taking over KML. Created in 1992
to advise on maximising income from parking sites, the small Kent-based group
has regularly featured among the top 50 firms in the sector. Sinclair
has said she sees KML as a core part of Mission’s strategy, marrying expertise
in maximising parking income flows with the capability to see property development
This might reawaken the interest of Delancey, another of the many failed
suitors for NCP, which was taken over by Macquarie. Chief executive Jamie Ritblat said at the time
he was willing to put £100m in the sector. Delancey’s
involvement so far has been limited to a deal with Britannia to pay £3m for
the Fullerton Street
Car Park in Ayr, reflecting an initial yield
of about 8%. Pressure on conventional investment yields could bring the sector
back into focus.
Interest is not just confined to the UK. 3E Car Park
Investors has linked with some of the top parking management names and construction
giant ILF to seek the same opportunities in eastern
Europe. 3E has launched a fund regulated in Luxembourg with
a target size of Euro600-700m to create a portfolio of car parks in this relatively
untapped area. It believes this could generate yields of 8-9% compared with
an average 6-7% for commercial property. Three institutional investors
are understood to have committed Euro50m before the fund’s first closing.