Demand for parking spaces in 2024

Since the end of 2023, in Moscow, incentives for developers, which allowed them to reduce the number of underground parking spaces through the use of special technical conditions, have ceased to apply. At the same time, city authorities are increasingly developing land plots for garage cooperatives and complexes, including unfinished ones: in March alone, the city announced plans to develop at least three such areas. Kommersant looked into how these trends affect the demand for parking spaces.

According to the Metrium company, in January-February 2024, 3,342 parking spaces were sold under equity participation agreements (DPA) within the old borders of Moscow. In general, the demand for parking lots is beginning to recover after the decline in 2022, according to data from the Telegram channels “Sales Pulse of New Buildings” and “Either-Or. Comparison Reviews of new buildings.” They calculated that at the end of 2023, 14.3 thousand child-care centers were registered for parking spaces, compared to 13.2 thousand a year earlier.

Commercial Director of Optima Development Dmitry Golev reminds that parking lots, especially underground ones, remain a low-margin asset for developers, therefore in most projects, with the exception of large-scale neighborhoods, there is a low coefficient of provision of parking spaces. “This is mainly a competitive advantage that increases the status of the project, but not an independent source of income for the developer. Therefore, the attractiveness of parking spaces for investors in the near future will remain at an increased level,” he assures.

Indicators above the security standard are rare – for a developer this is not very rational from an economic point of view, confirms Denis Konovalenko, managing partner of Prime Life Development.

Parking for investors

If we talk about parking as an investment tool, then, according to the managing director of Metrium, Ruslan Syrtsov, today every tenth transaction is made by a professional investor, counting on the further resale of the property or its rental. Such a lot can be a good investment if the residential complex has few parking spaces relative to the number of residents.

The profitability from renting a parking space, as a rule, varies from 7% to 12% per annum, and the payback period is about 8–10 years.

Another category of investors are those who buy parking spaces for short-term ownership in order to later resell them at a higher cost. “As a rule, the demand for parking spaces in a project grows as the surrounding development develops (including not only residential, but also public, administrative, business, etc.), and the commissioning and occupancy of neighboring properties,” says the executive director of the Moscow Investors Club Vladislav Preobrazhensky.

Both those who are committed to long-term leasing and those who expect to quickly resell a parking space to the end user should carefully study the property and surroundings before purchasing a lot, advises Artem Tsogoev, a member of the board of directors of the commercial real estate investment platform SimpleEstate. He gives an example of a multi-storey garage complex as part of a residential complex near the Salaryevo metro station. In the three years since the start of the project, prices for parking spaces have not increased here, and for some lots they have even fallen. In order not to encounter a similar situation, Artem Tsogoev recommends choosing projects with a provision of parking spaces at a level not exceeding 20% ​​of the number of apartments, with limited conditions for parking on the street and remote from the metro. “If we are talking about new buildings that are located in the city and require a shortage of parking spaces, then such a case always causes increased demand from both investors and end users,” argues Mr. Tsogoev.

If you don’t have enough for an apartment

Commercial Director of OM Development Anna Sokolova notes that today the share of investment transactions with parking spaces has increased slightly, which is largely due to the increase in the cost of apartments. As a result, demand has partly shifted to properties with lower purchasing budgets. First of all, clients who have begun to choose small formats seek to save money in the face of inflation. Parking is especially in demand in complexes of business class and above, where one family can have two cars.

As of March 2024, the average cost of a parking space in the mass segment reached 2.2 million rubles, in business class – 3.1 million rubles.

In premium projects, parking lots cost 3.5 million rubles, and in the elite segment – already 16.9 million rubles, Metrium calculated. OM Development estimates parking spaces to be a little more expensive: 3.5 million rubles. for business class and 5 million rubles. for premium.

According to analysts, prices are growing most dynamically in the lower and upper segments: over five years, parking spaces in mass new buildings have risen in price by 83%, and in luxury buildings – by 2.8 times. For parking lots in business class projects, the cost increased by 41%, but in the premium class prices did not change, says Mr. Syrtsov.

However, Metrium warns that the demand for parking in the current conditions is difficult to predict, because the demand for parking spaces also depends on the situation in the car market: cars, as well as their maintenance, are becoming more expensive.

Among other factors that could affect the demand for parking, one can highlight the implementation of integrated territory development projects (CTD) on the site of garage-building cooperatives (GSK) and unfinished garage complexes, as well as the actual tightening of requirements for the provision of parking spaces in new projects. As Anna Sokolova clarifies, the minimum security indicators in projects using special technical conditions were at the level of 0.33 parking spaces per apartment. Now the figure has risen to at least 0.4 per apartment.

The Moscow Investors Club doubts that the cost of parking spaces will be affected by the demolition of the GSK: many experienced car owners still prefer to leave their cars in nearby courtyards or in paid street parking lots using preferential residence permits. “In the market as a whole, the implementation of the CRT program will not lead to a significant change in the cost of parking spaces, but in individual projects this impact may be stronger,” OM Development does not exclude it. The abolition of previously existing special technical conditions, despite the increase in parking volumes in new projects, is unlikely to affect the investment attractiveness of parking spaces, Ms. Sokolova believes.

Where else can you park money in a residential complex?

Another so-called small format of commercial real estate, which investors have become increasingly interested in in recent years, is storerooms, or kellers. “A few years ago, pantries were a relatively illiquid product, for which developers even gave discounts. Today prices have risen significantly because people have tried this investment instrument,” says Artem Tsogoev.

The growing demand for such lots from end users is due to both the growing cost of apartments (buyers seek to optimize housing space and not pay for “extra” meters) and architectural solutions. Most modern projects do not include the presence of a balcony, where people are also accustomed to storing their belongings, and in such cases, residents resort to renting or purchasing storage rooms, which solve this problem.

“In most cases, storage rooms are in demand: you can’t throw your things, tires, into the field. If the apartment has a balcony, people will use it; if there is no balcony, then, accordingly, you can go and use the storage room. And this is an important difference between kellers and parking spaces – it’s easier to do without parking, because you can simply leave the car on the side of the road,” Artem Tsogoev is sure.

Analysts are also talking about growing interest in kellers. In the first two months of 2024, 1,949 storage units were sold under DDU in “old” Moscow (Metrim data).

The average cost of storage rooms in new buildings in the mass segment today is 0.7 million rubles, in business class – 1 million rubles, in premium class – 0.9 million rubles, in elite class – 7.1 million rubles.

According to Telegram channels, for the entire 2023, 2.8 thousand agreements were concluded on the market for storage rooms, a year earlier – 1.7 thousand contracts.

However, Mr. Tsogoev recalls the risks accompanying this type of real estate: “Currently for investors there are certain legislative risks that can hinder the development of the market. For example, if a fire occurs in a cellar, responsibility for the damage falls on the owner of the premises.”

However, the expert recalls that, in fact, parking spaces, storage rooms, and even retail on the first floors are nothing more than a by-product of mass housing construction. Accordingly, the development potential of small formats solely and completely depends on the state of the residential real estate market and new construction.

Natalya Piunova