How to future-proof the car parks of tomorrow

COMMENT Electric vehicles are transforming real estate and investment. Landlords face some challenges when it comes to EV adoption – nonetheless, there is an opportunity to take advantage of emerging trends, writes Paul Gallagher, car park consultant at JLL.

In today’s digital economy, industry boundaries are blurring and patterns of consumption are following suit. Vehicle users in the UK are not only becoming more environmentally conscious, but increased governmental levies on less friendly alternatives mean that a choice of “green”, and often electric is more economically viable too. That, coupled with step changes in technological innovation and vehicle enhancement means that the price parity between internal combustion engines and greener alternatives is closing.

This notion is supported when you consider the uptake of electronic vehicles in the UK. In the first quarter of 2018, one electric vehicle was registered every 3.6 minutes. Staggeringly, by June 2018, 487,374 electric vehicles were registered, up from only 1,000 in 2011.

This upward trend in combination with shifting perception towards car ownership and its implications means that car parks are taking a change in direction, too. Those with electric charging facilities have now become a destination and a far more viable investment option as the expectation for enhanced service provision and grid capability beyond the requirement of a physical vehicle space is on the rise.

Opportunity

The industry is greeted with an opportunity to capitalise on these emerging trends and build a service or even experiential model beyond the traditional car parking provision currently in place. There is still a way to go for both the private and the public sector, however.

Recent research by JLL on local authority car parks showed that out of 276,000 spaces in the survey, only 0.003% had any electric charging capability. A lack of improvements in charging infrastructure could stall the electric vehicle revolution or present a missed opportunity to the parking providers of today.

As we examine rapid shifts in consumer, driving and digital behaviours, it is important to also consider the role of disruptors such as Uber, Zip Car and the gig economy, all of which could impact the proportion of car ownership as we look into the future. Will our next car parks instead share their space with the likes of Amazon lockers, Uber drop-offs and dark production units?

With this in mind, how can investors and car park providers future-proof the car parks of tomorrow? These trends suggest that car parks could become the fuelling stations of the future, thereby presenting a more attractive and sustainable option to investors.

Range anxiety

There is also the concept of range anxiety to be considered – owners of electric vehicles are currently concerned by the risk of their vehicles running out of juice or not having enough to allow them to reach their next destination, and as such will charge them in whichever location for longer than necessarily needed. Therefore, dwell times are likely to be much longer in car parks, justifying additional expenditure on EV infrastructure and bolstering income streams.

Socially, the perception of the asset to investor vastly improves based on additional utility and enhanced customer and tenant satisfaction.

The renewables factor is an interesting one, with the new model of car parking provision providing opportunities to combine EV infrastructure with renewables to deliver a zero-carbon mode of transportation for customers. With mounting pressure on environmental sustainability and ethical consumption, this is an increasingly influential consideration.

Data insight

The other underlying opportunity with EV parking is data insight. We are rapidly moving into a cashless, mobile-driven society. Just as payments are no longer cash-driven, we could move into an era where people aren’t driving their cars, either – they’re driving their smart devices. With every decision made, transaction taken and action derived, consumers are creating exponential amounts of data from which insight and actionable decisions can be taken.

Data produced by car parks and driving/purchasing activities can be used to analyse consumer behavioural patterns, anticipate demand, dwell time and determine appropriate pricing and service models. Mobility as a service is an increasingly prominent theme in urban transport systems.

Hurdles to adoption

Despite these benefits, there are still several hurdles to EV adoption in car park service models. As much as future-proofing is important, with behaviours and trends shifting so quickly, it’s difficult to confidently predict and cater for the right EV capacity, with a significant cost presented to landlords in terms of installation and electricity.

From a power perspective, EV charging could also add a burden to an already overstretched grid – will we actually have enough to power the growth in adoption of EV and public recharging? This is especially pertinent from a sustainability perspective too, given that, despite electronic consumption having the edge over fuel-based alternatives, the current grid is still not low/zero carbon, so we would not be completely removing the prospect of carbon emissions, despite its significant reduction.

Finally, the presentation of a more sustainable consumption of driving could discourage the use of public transport as personal driving becomes a more economically and environmentally viable option.

Need to act quickly

That being said, consumers and business are increasingly incentivised to move towards a more sustainable form of consumption, and with little doubt that electronic vehicle ownership is on the rise, parking providers will need to take action quickly to cater for their needs at least in the immediate term. This, coupled with the notion that by 2040, all vehicles sold in the UK will be zero emissions, provides the impetus to factor in the infrastructure to support them.

Car parks are set to act as the fuelling stations of the future for consumers and perhaps even hubs for final-mile journeys from a logistics perspective too.

It’s important to consider new concepts of mobility and how they could shape car park users’ needs and requirements, but with a continued government drive to improve air quality and reduce emissions, electric vehicles are here to stay and car parks are future-proofing to cater for that.