The Let’s Get Wellington Moving project has signalled the removal of some tracts of on-street parking to be replaced with plantings or cycle and walking lanes to improve the city’s liveability, while a recent “parklet” trial that uses parking spaces to create additional outdoor seating for hospitality businesses, is gaining some support.
Add to this the removal of prescribed parking requirements for intensified residential developments, and security concerns of vehicle owners in the city, and it is apparent that space within existing dedicated and monitored carparking buildings will be in high demand.
James Higgie and Mark Hourigan of Bayleys Wellington Commercial are marketing two levels of the Marion Street car park, leased to Wilson Parking New Zealand Limited, the country's largest private parking operator.
Wilson Parking operates more than 200 car parks, and provides space for more than 30,000 vehicles each day across New Zealand.
Located at 28 Marion Street, Te Aro, which runs between Vivian and Ghuznee Streets, the subject car park offers 202 undercover parking spaces held in 10 separate freehold unit titles with a total floor area of 2,843sqm, across levels one and two of a seven-level mixed-use building.
The unit titles are offered for sale either as one lot, or as individual unit titles, by tender closing 4:00pm, Wednesday 27th April.
Higgie said the carparking component of the multi-level building – which has retail at ground level and apartment living and associated resident parking on the upper four levels – is leased to Wilson Parking with a further six years left to run on its existing lease and no rights of renewal.
“The offering returns a net annual passing income of $631,618 plus GST and within the existing lease, there are some flexible provisions around use which could provide a number of options for an astute add-value purchaser,” said Higgie.
“As the 202 spaces are spread across 10 separate freehold unit titles, there is potential for an entry-level investor or owner-occupier to tender for individual unit titles.”
Levels 1 and 2, together with the ground floor units, make up the commercial portion of the building and are excluded from any long-term maintenance costs of the residential apartments on the upper levels.
Two of the subject titles contain three car parks each so a new owner could potentially retain one for personal use and rent the other two out. Additionally, two of the titles comprise 42 car parks each and the balance have from 15-24 car parks each.
“Add-value investors could look to further split the unit titles and sell-down some, or all, of these,” said Higgie.
“There is intrinsic opportunity here for both larger-scale investors and smaller parties to put their best foot forward through the tender process to secure a slice of valuable inner-city real estate in a sector that is becoming increasingly in-demand.
“Constrained supply and reliable income streams make this an attractive asset class to invest in.”
With considerable residential accommodation intensification underway in the inner city, and nationwide changes to developer requirements for parking, demand for carparking space is expected to escalate.
In Tier 1 cities like Wellington, the recent National Policy Statement on Urban Development 2020 enables residential developers to maximise useable land for liveable space, rather than allocating a prescribed percentage to parking, other than in respect to required accessible car parks.
“This adds weight to the value of those dedicated carparking buildings that in addition to casual parking offer long-term parking arrangements on monthly agreements to meet the needs of apartment dwellers who still require guaranteed parking close to where they live,” said Higgie.
“Due to a shortage of CBD development land, and the constraints of its geography, Wellington will inevitably need to grow up not out, and there is significant apartment and other higher density development taking place around the city.”
The carparking building in Marion Street has easy access to and from the motorway and other arterial routes, along with walkway access via the revamped Swan Lane to Cuba Street.
Wellington City has lost significant carparking building options in recent years.
The Michael Fowler Centre car park is closed as the land is being used for a new temporary home for the Royal New Zealand Ballet; the Reading car park building was demolished following the 2016 Kaikōura earthquake, and the Civic Square and James Smith parking buildings remain closed because of earthquake risks.