glasgow - investment highlights · park first investment highlights — 2015 ... obtain the best...

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Investment Highlights— 2015

Park First Investment Highlights — 2015

Air travel has been on a journey of its own since the first ever scheduled passenger flight took to the skies in January 1914. More than a century later, this multi-billion pound industry continues to evolve.

Up until the 1970s, the sheer expense of international air travel meant it was only commonplace among the wealthy upper echelons of society. Everything changed when Southwest Airlines launched in 1971 and introduced the revolutionary concept of low cost airlines to the USA, and eventually the world. And this concept radically changed the future course of aviation.

Ailing Irish carrier RyanAir and Greek British start-up EasyJet observed the Southwest model to bring low cost flights to the UK and Ireland in the late 1980s and early 1990s. Transforming the way we travel, foreign holidays were no longer the exclusive domain of the rich – suddenly, everyone could stretch their family budget to an annual sunshine break.

In 2013, 228 million passengers travelled through UK airports and this number continues to grow annually. The UK boasts around 36 million drivers1 with 73% of the UK population aged 17+ holding a full driving licence in 2013 – that’s 80% of men and 66% of women.

Naturally, more and more people drive to the airport for business and leisure trips than ever before thanks to the rise in air and road travel.

Parking is a key source of airports’ non-aeronautical revenue, since airlines rather than airports profit predominantly from the flights.

1 RAC Report on Motoring 2014

The ACI Airport Economics Survey 2013 revealed that car parking accounted for an average 20.2% of global airports’ total non-aeronautical revenue in 2012, making up 14.4% of non-aeronautical revenue in Europe.

As we continue to fly with increasing frequency, enjoying both domestic and international flights for business and pleasure, the demand for car parking grows at every UK airport and as the fastest growing airport in the country, Glasgow International Airport is certainly no exception.

Glasgow International Airport saw 7.7 million passengers travel through its doors in 20142 yet it has a modest 2,700 long-stay spaces of its own. Constant investment and ongoing expansion over the next 12 months and beyond means demand for affordable and convenient car parking solutions are at an all-time high.

Car parking specialists Park First have created a rare opportunity in the investment sector – a low cost, high yielding investment product that’s hands-off and hassle-free.

Part of the Group First network of property companies, Park First offers investors the chance to purchase a long-standing space from £20,000, with guaranteed yields of 8% in years 1 and 2 and projected yields of 10% for year 3 onwards.

2 http://www.airportwatch.org.uk/recent-airport-figures

Purpose built long stay secure airport car parking,in close proximity to Glasgow International Airport

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Non-aeronautical Income Breakdown by Source (2012)


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“Most cars are parked 90% of the time”— International Parking Institute

Just as the concept of budget flights migrated to the UK from North America, the idea of investing in car parking spaces originated Stateside too.

Never before in the history of UK air travel have single car parking spaces been available for sale to investors. Until now. As single car parking spaces have lower minimum investment levels, this is an investment product accessible to all.

That’s not to say car park investments are a new concept. Key players in the global parking industry have operated investment opportunities for decades, but have typically focused on the sale of entire car parks or chains making entry levels high and therefore inaccessible to the average investor.

The difference with Park First is that we have introduced single space investment to the marketplace, evolving the potential of this lucrative product and enabling every investor to take their own highly profitable piece of the pie. In fact, the entry level for individual car parking investments is generally lower than that of traditional residential or commercial property, with minimal involvement required from the investor and the potential for much higher returns.

For the average low level investor, the chance to incorporate a sought-after commercial property asset into their portfolio is a previously unattainable opportunity they cannot afford to miss.

The demand for UK airport car parking spaces has soared in the last decade and is set to grow further with reports from

motoring organisations predicting there will be an incredible 39 million more vehicles on British roads alone by 20301.

Park First has a product portfolio which includes six established car parks which have served Glasgow International Airport for more than 15 years. This presents an exciting opportunity to invest in commercial property and own a tangible asset, with each investor receiving their own personal title deeds from the Land Registry.

Falling firmly under the HMRC’s definition for what is suitable for Self-Invested Personal Pension investments, Park First car parking investments is a solid and proven commercial property investment.

Park First has developed all six car park locations to the highest standard with state-of-the-art security and CCTV, online booking systems, shuttle bus services and space-age waiting rooms to service Glasgow International Airport’s blossoming stream of customers.

The nature of car park investment means it poses minimal risk and offers a stable and consistent income stream, even under difficult economic conditions.

With little call for renovation or maintenance, car park investments are considered one of the lowest maintenance products on the market today, enabling investors to take a hands-off approach while enjoying attractive returns.

“If you have the space in the right location, operators chase landlords. You essentially don’t have vacancy issues.” — Peter Volakos, Colliers International Director, Office Valuations.

1 http://www.yourmoney.com/investing/investing-in-car-parks-a-good-vehicle-for-income-seekers/

Car parking spaces which have been serving Glasgow Airportfor over 15 years, have now been released for sale


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Each Park First car parking space is subject to two independent valuations by the Royal Institute of Chartered Surveyors.

These valuations are available to view on the Park First website, www.parkfirst.com

We opt to secure two separate valuations to assure our investment clients of the value of the product before they buy, ensuring peace of mind from the outset.

To ensure Park First customers enjoy a minimum 25% rise in capital growth from day one, we offer car parking spaces for sale at a discounted rate.

Multiple car parking spaces can be purchased using one Land Registry title deed to save on completion costs on larger property investment portfolios; our average investor purchases three car parking spaces.

The Royal Institute of Chartered Surveyors is the industry body responsible for professional qualifications and standards in the development of land, real estate, construction and infrastructure.

RICS accredits 118,000 professional chartered surveyors to carry out valuation and management services across the UK.

With an esteemed reputation in the industry, RICS-registered professionals offer a quality, ethical service which gives our Park First investors complete reassurance of the value of their investment.

Park First commissions professional valuers with a deep understanding of the profits method of valuation and

trading potential to carry out valuations on your car parking space.

Their specialist experience enables them to establish market value for a capital valuation or market rental value, taking into consideration aspects like the development potential of the site in question. Our valuers understand the commercial property market and the investment industry, endeavouring to always take into account a comprehensive spectrum of variables when formulating an official valuation for your space.

By securing two such independent valuations, you are safe in the knowledge the value you are given is accurate and informed, enabling you to enjoy a discounted rate for your car parking space to benefit from capital growth with immediate effect.

Please visit our website, www.parkfirst.com to see current valuations with a realisable minimum 25% increase in value above the investor price paid, which confirms capital growth on each individual investment from the very beginning of your Park First investment journey.

Investors receive a minimum 25% risein capital value from day one


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From day one of your investment, your car parking space will be subject to a six-year leaseback contract which guarantees rental income for the first two years at 8% net per annum.

This contract enables Park First’s management company to rent the parking space back from you to rent out to end users, taking the day-to-day management of the product away from you to make it as hands-off and hassle-free as possible.

Our experienced and professional management company, which is separate to the investment company, will take care of your car parking space and maximise its potential occupancy at all times throughout your ownership.

The two companies operate as separate entities to ensure you have total peace of mind that whatever happens, our management company will be there to look after you and your investment. They provide the highest customer service levels, state-of-the-art security, sophisticated booking and payment systems as well as long-term marketing campaigns to remain ahead of the competition.

As mentioned, you will enjoy rental income guaranteed at 8% for years one and two of ownership of your Park First car parking space.

By increasing car parking rental prices in our annual upwards only rental review (while still maintaining a highly competitive price for end users), we can then project that your returns will rise to 10% in years three and four, then 12% in years five and six.

Returns can be paid quarterly or annually – that’s completely up to you.

When this six-year lease comes to an end, our partnership with you will switch over onto a management contract for life.

By agreement, both the investor and Park First can call for the lease to be ended on the second and fourth anniversaries should either party wish to do so, for example, for re-sale purposes.

Six-year lease in place upon completion whichgives excellent guaranteed returns


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Park First will re-sell your parking space, at your request, at any time during your ownership subject to a 5% resale fee. We will market the parking space at a minimum 25% above the initial purchase price to potential buyers to ensure we obtain the best possible price for your investment.

Airport car parking spaces in such a premium location are in seriously short supply.

We anticipate there will be huge demand for your parking space if you choose to sell it at any point in your ownership.

The potential buyer pool will include other investors, owner-occupiers who frequently fly in and out of the airport, airport staff, pilots and airline employees or even corporate companies who wish to utilise the space for their employees.

With Glasgow Airport only set to grow bigger and bigger over the next few decades as passenger numbers soar and airlines continue to add more and more services and destinations, parking spaces like those under Park First management will always be in a prime position to attract a high level of interest from both investors and airport customers.

At Group First, we strive for total customer satisfaction. We understand that there may come a time in your ownership when circumstances change and you may feel that your car parking space ownership is no longer the right investment for you.

Should that happen, our team is on hand to discuss your situation and come to a solution that works for you.

For more information about the Park First resale strategy, please speak to a member of the team using the contact details at the end of this brochure.

Resale strategy with a 25% projected profiton initial investment


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On the fifth anniversary of your ownership of your Park First car parking space, you will be given the opportunity to request that we buy back the space from you.

Subject to terms and conditions, Park First will purchase the space back from you for the original price paid.This has been set up as a safety mechanism designed for extenuating circumstances including death, incapacity or financial difficulty.

Park First is committed to working with you to ensure you enjoy the best possible experience of investing with us.The Park First developer buy-back programme is great news for investors as it affords you with complete peace of mind that you will be able to sell your car parking space at a fixed, agreed amount to an assured buyer, subject to terms and conditions, should your circumstances change in five years’ time.

Buy-back option agreements are common in the buy-to-let property market. They are simply an agreement between purchaser and vendor that certain events could lead to the developer buying back the property.

Full details of Park First’s buy-back option will be detailed in the contract you receive upon purchasing your car parking space.

Developer buy-back option withinyear 5 of property ownership


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A Self-Invested Personal Pension (commonly referred to as a “SIPP”) is the term for a personal pension scheme approved by the UK government, enabling individuals to have control over their own investment decisions by choosing from the full range of options approved by HM Revenue and Customs.

First introduced in 1989 by then Chancellor Nigel Lawson in his Budget speech, SIPPs were created to “make it easier for people in personal pension schemes to manage their own investments.”

The growth of the internet saw SIPPs grow in popularity from 2000 onwards, while the Finance Act 2004 saw simplifications to the tax rules surrounding SIPPs, which made them more attractive and accessible to investors.

Following these changes, tax practitioner and lecturer Dean Wootten wrote in Taxation journal in August 2005:

“In my opinion, SIPPs are an extremely attractive proposition post-5 April 2006 [when the changes came into operation].

“Purchasing UK buy-to-let properties via a SIPP would seem to be the most sensible option. These are very straightforward to hold in a SIPP and the full effect of the tax-free environment is enjoyed.”

Through a SIPP, investors manage their own pension plans, making informed choices about which assets they buy, lease or sell, having control over when assets are purchased or sold, subject to the agreement of SIPP trustees or providers.

As a type of buy-to-let commercial property investment, car parking spaces fall into the category of HM Revenue and Customs approved assets which are subject to tax breaks. Parking spaces are an immovable commercial property containing no element of residence.

We are proud that airport car parking spaces are a HM Revenue and Customs-approved commercial property product for investors to incorporate into their Self-Invested Personal Pension.

Airport car parking is a solid commercial property investment which has been proven to secure higher yields for investors than other types of commercial property. This is fantastic news for investors, as it means investing in single or multiple car park spaces through Park First is an intelligent way for investors to manage their own SIPP and maximise its true potential.

The Group First network of companies has been the market leader at selling investment products into pensions all over the world for the last five years, with an ever-growing roster of satisfied customers.

It’s estimated that more than £25million worth of UK parking spaces were acquired by SIPPs during 2014, administered by several different SIPP providers – so you can rest assured you are in excellent company when you choose this proven investment opportunity.

Self-invested personal pension approvedcommercial property investment


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The past decade has seen phenomenal growth in air travel as it has steadily become quicker, cheaper and more convenient to passengers.

• Britain has seen an almost fourfold increase in air travel in the last 30 years1

• In 1945, it took 130 weeks for a person earning the average Australian wage to earn enough for the lowest Sydney to London return airfare. In 2009, it took just 1.7 weeks2

• More than 200 million passengers travel through UK airports every year3

• Demand for flights in the UK is predicted to double by 20504

• Demand for business flights is set to grow by 80% by 20305

• UK residents made 60.1 million visits abroad in 2014 – the highest since the post-recession decline6

• The number of visits to the UK from overseas residents rose by 5.2% to 34.4 million in 2014 – the fourth consecutive year of growth and a record high7

• Glasgow was the 4th most visited town in the UK outside of London in 2014, with 622,000 visitors stayed for at least one night8

With combined guaranteed returns of 16% for the first two years of your investment, Park First car parking investment is a proven, rock solid commercial property product.

1 www.letbritainfly.com2 Air Transport Action Group3 www.letbritainfly.com4 www.letbritainfly.com5 www.letbritainfly.com6 http://www.ons.gov.uk/ons/dcp171776_403337.pdf7 http://www.ons.gov.uk/ons/dcp171776_403337.pdf8 http://www.ons.gov.uk/ons/dcp171776_403337.pdf

Park First is able to guarantee returns to investors through rental reviews on each parking space under management.

By increasing rental rates from £45 per week, through to £55 per week and then £65 per week, we can ensure investors receive a steady, growing yield on their car parking investment with Park First.

At the same time, we are offering end users a competitively priced product which is safe and secure – indeed, the average price to park at Edinburgh Airport is already around £70 per week so Park First’s Glasgow Airport stock is highly affordable to the consumer.

The Park First car parking investment product is designed to benefit all.

Established market with guaranteed returnsand projected increases in rental income

Visits to and from the UK1994 to 2014

Top 20 UK towns (excluding London) visited for at least one

night, 2014


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Airport parking in the UK is officially the most expensive in the world.1

A survey conducted in early 2015 revealed that seven of the ten most expensive airport car parks in the world are located in Britain, with just a week’s parking at London City Airport costing up to £315 – more than the cost of some holidays – at its official sites.

This was compared to a modest £57 a week at Japan’s Tokyo Airport.2

So there’s no question the market is extremely lucrative. But how does it measure up to other types of car parking investment?

“A number of factors have come together to create an almost perfect storm which prohibits access to traditional urban centres for car users.” – Ojay McDonald, Re-Think! Parking on the High Street – Guidance on Parking Provision in Town and City Centres.3

Urban centres have plummeted in popularity as large scale out-of-town developments, retail parks and supermarkets promise free parking all day, every day and offer everything under one roof or in one handy location.

The past decade has also seen the boom in e-commerce enable us to fulfil our many and varied shopping needs online, from the comfort of the sofa.

1 Daily Mail, March 2015 – http://www.dailymail.co.uk/travel/trav-el_news/article-2981139/Seven-10-expensive-airport-car-parks-world-Britain-priciest-London-City-315-WEEK.html2 As above3 Re-Think! Parking on the High Street: Guidance on Parking Provision in Town and City Centres, Ojay McDonald, 2013

Between 2000 and 2014, UK high streets suffered a fall in their share of customer spending from 50% in 2000 to an estimated 40.2% - and there’s no argument that car parking costs and inconvenience played a significant role in this decline.4

Most towns were created before the existence of cars, so they are simply not designed to comfortably cater for the number of vehicles regularly frequenting their centres.

Town centres’ density and high concentration of land use, along with the issue of multiple land owners, make them difficult and expensive to adapt.5

In short, there are numerous social and economic reasons why shopping in town and city centres has seen a drastic decline over the past decade, so the future of city centre parking investment is questionable.

In contrast, airport car parking has seen incredible growth in the past 10 years and the burgeoning demand for quality spaces shows no sign of slowing down.

Airport car parking is the only type of buy-to-let commercial property parking product which is paid-for, where demand continues to soar and prices adapt to stay competitive.

More and more investors are enjoying attractive returns from this hands-off, low maintenance investment which is future proofed for many fruitful years to come.

4 http://www.britishparking.co.uk/write/Retail_Futures_2018_-_Centre_for_Retail_Research.pdf5 New Economy Car Parking In Town Centres Report, 18th June 2014; Re-Think! Parking on the High Street: Guidance on Parking Provi-sion in Town and City Centres, Ojay McDonald, 2013

Airports are creating the fastest growing demandfor parking throughout the United Kingdom


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In 2014, Glasgow International Airport saw a total of 7,708,897 passengers travel through its doors – a considerable increase of 4.8% from the previous year’s figures.1

Overall growth for UK airports is predicted to slow down to a steady increase of 1% - 3% a year up to 2050 (compared to historical growth rates of 5% a year over the last 40 years) as the market matures, the economy continues to recover from the recession and the long-term decline in average fares comes to an end.2

This still presents considerable growth over the period, representing a constantly evolving market promising exciting opportunities to today’s smart investor.The average number of international air trips taken by each resident in the UK increased by 5% a year between 1988 and 2008, from just under 0.4 international trips in 1988 to just under 1 trip a year in 2008.3

The Department for Transport (DfT) predicts that passenger numbers at UK airports will increase from 219 million passengers in 2011 to 315 million in 2030 and 445 million by 2050. This is an increase of 225 million passengers over the next 40 years compared to an increase of 185 million since 1970.4

1 http://www.airportwatch.org.uk/recent-airport-figures/2 Page 1, https://www.gov.uk/government/uploads/system/up-loads/attachment_data/file/223839/aviation-forecasts.pdf3 Page 69, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223839/aviation-forecasts.pdf - Estimates of the exact number of international air trips per person vary between sources. These are “backcast” numbers for consistency with the forecast to 1988 using the growth rates from the International Passenger Survey completed by the Office of National Statistics4 Page 1, https://www.gov.uk/government/uploads/system/up-loads/attachment_data/file/223839/aviation-forecasts.pdf

The DfT’s 2013 Aviation Forecasts believe that changes to technology will not affect the number of business travellers over the forthcoming decades – developments like the widespread availability of video-conferencing, for example, is not expected to impact on air traffic.5

Predictions for Glasgow International Airport’s passenger growth is substantial – it’s forecast to reach 9 million by 2030, 10 million by 2040 and 12 million by 2050, a significant and continual growth of a million more passengers every decade.6

Naturally, this is set to have a positive effect on the car parking investment market. The numbers speak for themselves – air travel is booming and investing in this flourishing sector is a financially savvy move for investors looking to make their SIPP perform above and beyond expectations.

An incredible £70.7bn was invested in UK commercial real estate in 2014, a 32% increase on the £53.6bn invested in 2013 and the highest annual volume since records began.7

Scotland in particular enjoyed a surge - consultancy JLL revealed that Scotland now represents the second-biggest region for property investment outside London, with investments totalling £3.2 billion in 2014.8

5 Page 46, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/223839/aviation-forecasts.pdf6 Page 7, https://www.gov.uk/government/uploads/system/up-loads/attachment_data/file/223839/aviation-forecasts.pdf7 CoStar Q4 and 2014 UK Investment Review, Source: http://costarfinance.com/2015/02/11/costar-2014-uk-investment-review-uk-commercial-property-investment-breaks-all-records/8 http://www.scotsman.com/business/management/scots-prop-erty-investment-hits-record-high-1-3684952

Airport parking is set to become the highest yielding and show the fastest capital growth of any buy-to-let property


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The UK is now the second largest commercial property market in the world, accounting for 18% of all global transactions.9

“The attraction of UK commercial real estate is that you get capital growth and income return” – Matt Oakley, head of commercial property research for Savills.10

Chris Ireland, chairman and head of capital markets for the UK at JLL, said: “2014 cemented the UK as one of the best markets for direct real estate investment and one that is being driven by both domestic investors attracted by the relative high returns property offers, and overseas investors drawn to the liquidity and transparency of the UK property market.

“In light of the low interest rate environment and volatility in other asset classes, we envisage another robust year for UK commercial property.”

Andy Brunner, investment strategist at Morningstar OBSR said: “Commercial property offers a very high starting yield, the prospect of solid capital growth and a pick-up in rental growth in the year ahead. Overall, the economic environment should remain favourable for commercial property with the asset class supported by high levels of income together with capital value and rental growth. Current forecasts of 9 to 10 per cent total returns for 2015 could well be revised higher as the year progresses.”11

9 http://www.scotsman.com/business/management/scots-prop-erty-investment-hits-record-high-1-368495210 http://www.moneyobserver.com/how-to-invest/begin-ners-guide-to-commercial-property11 http://www.investorschronicle.co.uk/2015/01/14/funds-and-etfs/the-big-theme/good-prospects-for-commercial-proper-ty-funds-in-A6h2EpPqeQzR79uetks0yJ/article.html

Compared to other kinds of SIPP-approved, buy-to-let commercial property products, car parking offers much higher yields.

As a real, tangible asset, car parking spaces are considered a stable investment even in times of general market instability as they tend to change in value independent of financial markets. Property assets are not usually subject to wild price swings and their value will never fall to zero, unlike other types of investment.12

US reports showed a significant increase in parking space values during the three years to 2009, despite the property crash affecting all other types of commercial property investments.13

The US National Parking Association reported that airports were the highest growth area in its 2013 report, and indications show US trends migrate to the UK.

Car parking technology continues to leap forward and offer state-of-the-art functionality to improve the customer experience.

Park First’s airport car parking sites feature Automatic Number Plate Recognition, which makes payment simpler and afford extra peace of mind to end users.

Benefits for investors include increased occupancy and heightened efficiency in allocation and supply.

12 Alternative Investment Report – Car Parks 2014, Intelligent Partnership13 Alternative Investment Report – Car Parks 2014, Intelligent Partnership

At the cutting edge

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Contact

Park First LimitedGroup First HouseMead WayPadiham, LancashireBB12 7NGUnited Kingdom

TelephoneT: +44 (0)1282 330 330F: +44 (0)1282 412 680

Email [email protected]

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