Parking spaces needed, but investors leery of filling the void
The increasing number of cars on Poland's roads has been fueling demand for professional parking services, but investors are still reluctant to put their money into parking facilities, according to companies that specialize in the sector.
Some of that reluctance can be attributed to the lack of support for parking development on the part of local authorities as well as higher returns on other property investments, parking lot operators said.
"There are few really well-designed parking places in Poland," said Marek Gonicki, president and general director of Capital Parking and Poland Parking, which together operate six parking lots in Poland.
And according to research conducted by Lokale Immobilia, few large-scale parking lot companies are present. The biggest companies, such as Parkingi Polska and Towing, manage seven lots each.
Western parking operators have slowly been starting to enter the Polish market, said Mateusz Waszkiewicz, an adviser at Walker Parking, a U.S.-based consulting firm that specializes in parking issues. Those companies typically manage multi-story or underground, stand-alone garages in Poland as well as parking lots anchored to entertainment and commercial buildings.
In addition to professionally managed lots, Poland also has numerous cooperative or local lots on open, undeveloped sites. Looked after by neighboring residents, these usually have only a fence as protection and offer no insurance against incidents such as car theft, Waszkiewicz said.
Western parking operators are currently searching for existing facilities in need of professional management or for developers of other types of properties that want to add parking facilities to their projects, sources said. But they are unwilling to invest in greenfield parking lots, primarily because local government authorities are reluctant to subsidize or issue permits for lots, especially multi-story, aboveground garages, parking sources said.
Operating a parking lot does not offer the same financial rewards as other commercial projects. "It's more profitable to build an office building or a shopping mall than a parking lot," Waszkiewicz said.
Apart from high land prices, what makes parking lots unprofitable is the authorities' insistence on underground parking lots rather than high-rise facilities, Waszkiewicz said. Underground parking lots are much more expensive to develop than aboveground ones.
"It costs three times more, so what's the point?" Gonicki said.
As companies need to invest a lot in technical infrastructure, even in the case of high-rise garages developers are only likely to see returns after 10-15 years, Waszkiewicz said.
"A parking lot must fulfill several requirements to be really good; a fence and a guard are not enough," he said.
Indoor parking infrastructure should include a well-designed building that facilitates traffic movement, clear signs, suitable lighting, air conditioning, ticket dispensers, and parking spaces 2.4-2.5 meters wide, Waszkiewicz said. Then there's the need to invest in car theft and damage insurance, he said.
But despite the high investment, operating a parking lot "could be very profitable," Waszkiewicz said.
Current facilities meet just 15% of demand, and one hour in a professionally serviced parking lot costs zl. 2-zl. 5 while monthly fees run zl. 80-zl. 1,150.
