The upward trajectory of office rents in the Perth CBD may be grabbing the headlines, but car bay rents are also doing their bit to create headaches for those who work in the city.
The upward trajectory of office rents in the Perth CBD may be grabbing the headlines, but car bay rents are also doing their bit to create headaches for those who work in the city.
Car bay rents have jumped markedly during the past three years, with bays in A-grade buildings now almost reaching the same price league as prime bays.
Jones Lang LaSalle strategic analyst Andrew Bouhlas said car bay rates in premium buildings had increased more than 14 per cent during 2006 to average $525 per bay per month, a jump from $460/pcm in December 2005.
However, A-grade buildings have been forced to play catch up as car bay rates in these buildings topped $496/pcm in December 2006, a 9 per cent rise on the $456/pcm recorded in December 2005, Mr Bouhlas said.
“A-grade bays jumped a staggering 40 per cent in the three years to December 2006, reflecting the increasing requirements for companies to attract and retain employees in the CBD head offices by providing attractive salary packages including CBD car bays, in competition with lucrative on-site salary packages,” he said.
As demand rises and supply falls, premium car bay rates are forecast to increase at similar levels to 2006, this year and are expected to breach the $580/pcm barrier by year’s end.
Jones Lang LaSalle national director of leasing, David Evans, said rates of more than $580/pcm were not out of the question and the limited supply was reflected in long-term average parking provisions of 1:200 of net lettable area.
“The Perth CBD has one of the lowest rates of parking spaces and stations in Australia,” Mr Evans said. “CBD tenants can expect to see car bay rates escalating further on the back of continuing demand and limited supply.”
Property Council of Australia (WA) senior policy adviser Lino Iacomella said parking costs in the city centre had risen sharply in recent years because of large increases in parking taxes, and government policy that was antagonistic towards commuting and parking in the city.
Mr Iacomella said the Perth Parking Licence fee payable by property owners who provide tenant parking facilities, which had risen by an annual average of 18 per cent per year since its inception in 1999, should be abolished.
“The tax funds public transport in the city, however it is highly discriminatory because it lumps all the cost on one isolated business sector – owners and tenants of city buildings. This results in distortions like sharp increases in tenant parking costs,” he said.
