Investors attracted to the profitability of car spaces in a parking facility in Mascot, adjacent to Sydney Airport, have purchased hundreds of them over the weekend.
All of the single freehold strata title car spaces (154) were sold and 147 of the 450 double spaces were secured in what was a stage one sell-out. The single spaces cost $57,500 and the doubles were sold for $104,500.
Erle Cramer, managing director of Cramer Property said: “Demand for the car spaces has exceeded expectations. To sell over 300 car spaces in one weekend is a phenomenal effort and demonstrates there is significant demand for this real estate asset class.
“Investors realised the opportunity to invest in a car park represents a very rare investment opportunity. Considering the demand, we have immediately commenced stage two sales.
“Over half of the sales went to people seeking to further diversify the asset base in their self-managed super funds (SMSF). Purchasers came from as far afield as Hong Kong and London. In many cases, investors bought multiple car parks. One investor from Sydney bought six for various family members.”
The car park, which is operated and tenanted by Park and Fly, turns over 2,000 vehicles and services more than 4,000 customers each week.
Over 37 million people fly into Sydney Airport each year, and with this figure expected to double by 2020, the demand for car parks close to the airport is growing.
The car park has a lease length of five years, with three five-year lease extension options. An initial 6.5 per cent per annum net return is offered in addition to three per cent rent increases each year, except on the exercise of the option, when the increase will be four per cent.
With the weekend sell out of stage one, purchasers are now placing $2,000 refundable deposits to secure a car space, subject to availability in stage two. Preference of allocation is being given in order of the deposit date.