Lack of parking space boost for close-to-work living space

08-03-2006

There are early signs that residential properties close to upmarket work opportunities are deemed more desirable than those further away.

Commuters are prepared to pay a premium to be close to work, because they make up for it through time and travel savings, says Rode & Associates CEO Erwin Rode.

One of the reasons is that the low interest rates and greater wealth among the employed have led to record car sales. Thus a large percentage of workers who used to travel by public transport now use private cars. This has resulted in an increase in the number of vehicles on our roads, which in turn is causing an increase in traffic congestion, particularly during peak periods.

One of the effects this is having on properties is that the parking requirements for office buildings have grown. The rule of thumb for office-building parking requirements used to be 2 bays for every 100m² of rentable area in CBDs versus 4 bays for decentralised office nodes.

The new parking-bay norm is 4 bays for every 100m² of CBD office space, while the ratio for decentralised office space has grown from 4 to 5 or even 6 bays. As a result, landlords of office buildings with lower parking ratios may find that parts of their buildings have become unlettable.