Car parks are proving increasingly attractive to investors, property experts have said, following a string of deals involving sites in Scotland.
Knight Frank, the commercial property consultancy, said it had just signed off on deals for The Glasshouse Car Park in Glasgow and Aberdeen’s Shiprow Car Park.
The firm brokered a transaction on behalf of KFIM Long Income Property Unit Trust for The Glasshouse, which is located in Glasgow’s Merchant City and sold for £8.9 million, representing a net-initial yield of 4.02 per cent. The building is leased on a long-term contract to National Car Parks (NCP) and consists of 515 spaces.
Also let to NCP on a long-term deal, Aberdeen’s Shiprow is part of the wider City Wharf mixed-use development in the city centre and offers 386 spaces. It was purchased for £5.43m, with a net-initial yield of 4.75 per cent.
The latest transactions follow the earlier acquisitions of two Glasgow car parks, an NCP site on Mitchell Street and Q Park on Jamaica Street. In both cases Knight Frank acted for the purchasers. The assets sold for £10.62m and £11.45m, securing net initial yields of 4.42 per cent and 4.64 per cent, respectively.
John Rae, investment partner and head of office at Knight Frank Glasgow, said: “There’s a great deal of appetite for secure long-term income against the backdrop of an uncertain economic outlook. Car parks can offer that to investors with a blend of long leases, steady income, and strong covenants.
“Their growing popularity as an investment is reflected in the level of registered interest in the car parks we recently bought and sold, which either went to a competitive closing date or were secured off-market and completed very quickly.
“Depending on how the next few months pan out, we could see more activity for cark parks,” he added.