Parking space accelerates profit By Kate Patterson Brisbane Courier Mail October 22, 2006 12:00am
THE Brisbane sign reads "property to rent at $380 per month". That's for a parking space.
It may only be a few square metres of concrete, but properties of this kind in prime business locations are making their owners a tidy profit.
Take Mike Marzano, 25, from suburban Chelmer. He brings in $275 a month by sub-letting a car park in Mary St, in Brisbane City.
The parking space is allocated to his office, which he uses only after usual business hours.
"I had the option of paying extra on my office lease for the parking space, but I'm not at the office during business hours so I wasn't sure it was worth it," he said.
"I have successfully rented the space under a timeshare arrangement so the space is rented during business hours and I use it after hours.
"I ended up getting as much as I was paying for the spot in total so by sub-letting and manipulating the terms effectively, I have the spot for free after hours," he said.
It remains to be seen whether people will rethink driving to work in Brisbane City, after this week's gridlock when part of the Riverside Expressway was closed, but Mr Marzano found City spaces were in demand.
He listed his space on Findacarpark.com an internet car parking scheme providing Brisbane commuters with empty car spaces.
"It's obvious from all the traffic that parking in the City is in short supply and therefore highly sought after," Mr Marzano said.
"By renting privately, my tenant has a guaranteed spot in a prime location all day, every day for a fixed price which is less than the fees for complex or meter parking," he said.
Website founder Francis Armstrong said most listings were snapped up within 24 hours of becoming available.
"You go to commercial streets and all the spaces are full and you walk down to the residential part and there'll be 20 spaces completely available."
Debra Noble, 32, a Brisbane project manager, rents out her spare car park in the Kangaroo Point apartment complex where she lives.
"It was empty and it was a great way to assist me in paying my weekly apartment rental," she said.
The Sunday Mail revealed in February that privately-owned car spaces could fetch up to $55,000 in inner Brisbane.
Syd Walker, a property investor from Alexandra Headland, is in a partnership which owns 80 strata car parks in Spring Hill and leases them to the public.
"From an income point of view, four years ago people were letting them at $140 a month and today it's about $260," he said.
"Four years ago I had doubts (about buying the parks) because the return was something like 3 per cent," he said.
"It's still an evolving investment and the main thing that's going for any car park in Brisbane is the city council restricting the new supply of inner-city car parks, hoping to encourage people to use public transport.
"As a result, existing car parks in Spring Hill have risen in value from $17,500 to $30,000 in the past four years."
He said buyers had ongoing annual costs including about $1030 in body corporate fees and rates.
Christian Sandstrom, of Jones Lang LaSalle realtors, said the limited car parking in the CBD would mean the power would continue to be in the landlords' court to push rents higher.
"Rents have increased on average by $100 to $120 per bay per cubic metre over the last 12 months," he said.
"Whilst there is no firm evidence, we understand that rentals range from $320 to $380 per bay, per calendar month for non-commercial buildings.
"In my opinion, on average, a car space in the CBD is worth $60,000."
Mr Sandstrom said owners of inner-city residential towers were discouraged from renting out their unused car parks.
"Some body corporates have lobbied against this practice and introduced rules to avoid potential security risks."
WHAT IT COSTS
TONY Hajjar of Ray White Commercial Sales said Brisbane car parks cost between $25,000 and $55,000 still short of the $80,000 commanded in Sydney.
He said buyers had ongoing annual costs, including about $380 in body corporate fees, $400 in rates and $233 for water.
There are fees to advertise online. Findacarpark.com.au takes a 5 per cent commission when a space is matched with a tenant. Carpark.com.au charges members a small referral fee when their car park is viewed by a potential customer.
WHAT YOU GET
Car parks were being advertised across Brisbane last week for $100 to $380 a month.