Posted on : 21-06-2017 4:18
An Exciting Investment Opportunity at UK Airports.
More and more we hear about this fantastic investment opportunity which has got nothing to do with stocks and shares, funds or even the City in general! What are we talking about..? Car Parks! Yep, car parks, a small piece of tarmac near an airport can out perform even the best managed funds out there!
It makes total sense though, that a small pieces of tarmac can generate such good returns on your investment when you consider more and more people are going on holiday more often with airports constantly reporting increased numbers of passengers and with some airports wanting to expand.
In a nutshell, demand is constantly outstripping supply, which is backed up by the many planning requests from existing off airport car parks wanting to increase their number of parking bays either by expanding their current car parks or creating new ones.
When you consider that airport parking in the UK is worth around £9.5 billion every year as a gross rental income, it doesn’t take a genius to see why it has become such a sought after form of property investment.
So How Does It Work?
Really simply put, you invest your money in a car park space or spaces on a buy-to-let basis from an accredited agent. You initially purchase a hands-off lease (basically means you don’t have to do anything) for six years with the option to continue after the term is up. There are also other options available to you, including selling your parking space after the term is up.
You will receive a Title Deed which will confirm your ownership. Then every time your parking space is used you receive an income. Revenue from the lease is normally paid on a yearly basis and is not subject to UK VAT.
This is a really simplified explanation of how it works, there are obviously more details which will be explained to you via the agent handling your investment.
What Does It Cost?
This obviously depends on the car park and the airport it’s located at. Car parking spaces at airports such as Heathrow, Manchester and Gatwick will cost more, but they will also return more.
To give you a rough idea the average cost is around £20,000 to £30,000 per parking space depending on car park and airport. Obviously once you’re in talks with an accredited agent they will advise on exact costs and answer all your questions.
How Do You Get Involved?
A general search on Google for “uk airport parking investment” will return plenty of agents. One of the main companies in this market are Park First Limited which are part of the Group First property investment company. Park first own car parks near Glasgow and London’s Gatwick airports. They also lease many more at various airports in the UK.
In fact Park First own nearly 12,000 off airport car parking spaces outright and lease more than 5,000 off airport parking spaces at fifteen airports in the UK.
Cautionary Note from Park First
When considering any type of investment you must check the company thoroughly as well as ensuring that the investment is right for you. In regard to investing in UK airport car parking spaces you must ensure the company handling your investment is an accredited Park First agent.
Park First also warn against unscrupulous individuals masquerading as their agents, click here for the full report.
Some Example Figures
So, after all the talk lets see some figures.
Park First will guarantee you an income of between 8% – 10% on the first two years of the lease depending on which airport you choose.
Say you buy one parking space for £25,000. The first two years generate £2,000 per year at 8%. Then years three and four generate £2,500 per year at 10%. Then finally years five and six generate £3,000 per year at 12%. So that’s £15,000 generated in six years on a £25,000 investment. In this time a RICS valuation projects capital growth to be £12,500.
This would mean that on year six, if you decided to sell your airport parking space you would receive £52,500 from resale and income earned, that’s a 210% return!
We’ve really tried hard to think of any downsides to this investment, but we really can’t think of any. Even when you consider the usual cautionary tale about investments going down as well as up all you have to do is to look at the figures showing consistent air travel growth, plus take a look online at the various reports from airports throughout the UK stating that airport parking demand is outstripping supply. If that’s not enough check out the amount of planning applications from off airport parking operators to extend their number of spaces.
It all goes to prove that parking at UK airports is a truly solid investment with demand continually growing.
Just make sure that you choose a reputable firm to handle your investment and make sure the money you invest can remain invested for at least six years.
UK Airport Car Parks
Delivering value for money UK airport parking.