Investing in garages parks any sign of crisis


Parking spaces have continued to be an attractive real estate asset for the small investor. Despite of
landing of telework
and the impact of the Covid, garage rentals have consolidated as a simple option and without too many complications and frights for the little saver looking for long-term stability.

Once mobility is restored and back to the offices, the increase in the use of private vehicles to the detriment of public transport plays again in favor of these assets.

And the fact is that the strengths of garages as an investment instrument are clear: their high profitability, the reduced risk of non-payment, the small maintenance costs that it entails and the ability to acquire

this type of asset without having to resort to a third-party loan or a mortgage loan. «The purchase price is much lower than that of any other investment and therefore the profitability is from the first day “, assures the director of Studies and spokesperson of Fotocasa, Maria Matos.

And this is still very juicy. According to data from the real estate portal, stood in Spain at 8.7% in the second quarter of the year, a substantial gain in times of scarce alternatives for the conservative saver, although slightly below the 9.9% registered in the same period of 2020. Despite this setback, from Fotocasa they highlight that it continues to be the second highest profitability of the last six years.

Solvia’s estimates point in the same direction, and indicate that the profitability of these assets ranges between 7% and 8%. Even so, Gesvalt’s corporate director of business development, Luis Martin Guirado, considers that these percentages will tend to decrease “because there is a tension in income, there are free parking spaces and work buildings are freeing up spaces.” Matos also observes a gradual fall in rental prices “which has been going on for some time now.”

But the context encourages one to think that the value of garages as investment vehicles will remain intact in the coming months. Demand behavior is beginning to change. To the aforementioned increase in the use of private vehicles in the slow return to normality after the toughest stage of the pandemic, is added
the fact that parking restrictions are increasing in large cities
. “The revaluation of the parking spaces is very important because it not only allows parking but also allows driving through low-emission areas,” says the director of studies at Pisos.com, Ferran Font.

Restrictions

«The increase in restrictions for parking in city centers as well as the increase in restrictions on mobility by private car, is making the trend of increasing demand for parking spaces in cities continue over time “, agrees the real estate commercial manager of Solvia, Rafael Jimenez, who also highlights as a factor of increasing demand the fact that the population is reincorporating to face-to-face work and is abandoning teleworking.

These mobility restrictions, which only allow the use of the vehicle by the city to those owners of a home or parking space, it will make the prices of parking spaces much more stressed because “places are limited, no more garages are being built and that is going to mean that more and more people need a parking space”, reflects María Matos.

There will be stability, but for the moment, the experts consulted confirm, big price increases cannot be expected. It is a market that is “quite segmented” and in which the price ranges vary a lot, not only between cities but also between neighborhoods in the same locality. Thus, according to Jiménez, it is not the same to rent a parking space in Carabanchel, where a parking space can cost 5,000 euros than to buy it in the Chamberí neighborhood, where it can amount to 50,000 euros. Font agrees to describe the market as “very heterogeneous, highly conditioned by the location where the asset is located.”

Mismatches

Even so, Martín, who assures that for a real estate asset transaction to take place there must be a reasonable price negotiation between the seller and the buyer, affirms that there are still many sellers who do not accept the reality of the market price or are not in a hurry to sell, so they keep the price high for months. “I believe that the market is the one that dictates the price of assets and those who are out of the market will have it empty for a long time,” says Martín, assuring that the trend is not that prices rise but that they will remain, not forecasting either big downs.

Of course, Jiménez warns: being a scarce element in the cities and without the possibility of increasing, an increase in demand will lead to an increase in the price. Be that as it may, garages as an investment seem to put the crisis on hold for good and will continue to be, they say, a safe asset for the small saver.

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