Commercial Leasing: Why Car Parking Is Important

March 13, 2019 | Commercial Real Estate

Image of Sydney CBD with cars driving through the city | Car parking article

Car parking in Australian CBDs – even the words elicit feelings of unease and anxiety.

When choosing a new office space for your business, car parking is rarely the first thing you consider. But when it’s not included in your search criteria and negotiations, it can become a thorn in the foot for your business.

Why? Because there are limited car parking options available across the countries major cities and the City Councils are looking for ways to reduce traffic in the CBDs and the busiest parts of towns.

Why so serious?

First Impressions

Forget the lobby. The first impression your visitors will form about your business begins with accessibility. Where can they park?

If an important client does not have the option of convenient car parking in the immediate vicinity of your building (and has to circle the block four times before finding a paid park three hilly Sydney streets away), they may be on the back foot before they step in the door. So, consider parking a part of your customer service.

Staff comfort and security

If your staff prefer to drive to work, they’ll want to feel as though their assets (i.e. their precious vehicles) are safe while they are otherwise occupied. This means both protection from the street and car spaces that are wide enough to mitigate the danger of side-swiping; a huge cause of team friction when someone is unwilling to fess up!

Personal security when accessing the building is also paramount. If your employees are working late at night, it is important that they feel they can move to their car safely. Security cameras and security doors are worthwhile inclusions in your office space to prevent unwanted visitors in the carpark. And a close walk to the car at night is always going to be preferred to a stroll down a dimly lit street if you don’t have the luxury of security personnel.

A person walking through a staff car park | Car parking article

Team vibes and productivity

In 2019, providing car parking for some team members and not others is almost akin to allowing only select staff members access to the coffee machine. If department A is bestowed parking spaces, while department B are expected to park on the street, like it or not, there’s going to be tension.

While staff might enjoy the excuse to stretch their legs every couple of hours, they won’t enjoy the parking tickets that inevitably occur when they forget to set their “Move your car!” alarm on the phone… And while they’re lapping the block looking for a new space, your business is losing productivity.

But what else do you need to consider?

Detractors and negotiation

Levy and commercial incentives

SydneyMelbourne
Category 1 areaCBD: $2440CBD: $1440
Category 2 areaChatswood/ Bondi Junction: $870Southbank/ North Melbourne: $1020

In Perth, there is also a levy, one for long stay public parking, which is $1125 per bay per year. The other one is for tenant parking, which is $1,169 per bay per annum.

As of now (Q1 2019), Brisbane and Adelaide have not implemented a levy yet, even though the topic has arisen in discussions in the past in both cities.

This might sound like an awful lot of money, particularly considering the number of team members you have. However, it can fall into your lease negotiations when discussing potential lease incentives.

Where space allows, creating more parking may be a valid fit-out contribution. Where space does not allow for more parking, a rent abatement may help. In this case, you may be able to spend what you’ve saved on rent to secure parking close to your building.

Read more about commercial lease incentives here.

Reassess your options

If this is an option for your business, leaving the bustle of the inner city may reduce or remove car parking levies altogether, and provide you more space for less cost – in terms of both parking and office space. What’s more, outside of the CBD, you may be better positioned to negotiate with the landlord to create more car parks as part of your fit-out contribution, as well as to install security cameras/doors where applicable.

Image of the ANZAC Bridge on the fringe of Sydney CBD | Car parking article

Car Parking Negotiation

The added cost of parking could also be partially passed on to your employees. Not every employee will want to drive to work, opting instead for Sydney’s endless and improving public transport options. By negotiating to pass along a portion of the levy cost to your employees, you can empower them to make the call. Plus this means you can save money and prioritise your visitor parking.

The bottom line

When looking for a new home for your business, parking needs to be considered. Parking can be a huge expense for your business, and by locating your office in close proximity to public transport and offering employees to work from home these can be reduced.

Looking to renegotiate your lease to include car parking?

Tenant CS is a tenant advisory firm that works on behalf of commercial, industrial and retail tenants – no conflicts of interest.

We help commercial tenants navigate the complexities of the leasing landscape. We also advise them of the best route to take when it comes to leasing negotiations and incentives, commercial fit-outs, renewals, lease exits, finding the perfect office space and more!

Looking to renegotiate your lease to include parking, or thinking of moving offices? We’d love to work with you. Get in touch with one of our team members today.

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The Author

Francois is a highly skilled tenant representation specialist, who brings a wealth of experience across various real estate markets.

Part of the tenant representation Sydney team, Francois has a Masters in the Science of Management from Montpellier Business School (France) and a Bachelor (Hons) in Business Studies from De Montfort University (UK).

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