The City of Melbourne is enjoying a 12.5 per cent return on its investment in commercial car parks at the same time as it is using its planning powers to diminish supply.
The council in May revealed in its draft 2017 annual plan and budget that car parks were its best investment earner.
It has only 8 per cent of its $321.2 million investment portfolio in car parks ($25.7 million) but they are punching well above their weight with a 12.5 per cent return.
Car parks were the council’s top returner – out performing $21 million worth of cash and fixed interest (2 per cent return), $171 million worth of “subsidiaries and investments” (6.6 per cent) and $87 million worth of property (3.3 per cent).
However, the council is benefiting from significant commercial returns when it controls the demand.
Between 2008 and 2012, the council removed nearly 1800 off-street public car spaces in favour of other uses.
Not only is the council intent on reducing the number of on-street car parks within the CBD, it actively pursues planning policies which reward residential developments without car parking and it is hostile towards existing commercial off-street parking.
This approach, coupled with record land values, has triggered a number of conversions of commercial car parking to residential towers.
Last year, the city lost a 689-space multi-storey public car park in LaTrobe St opposite Melbourne Central. The council was similarly supportive of a bid to convert a 10-level, 539-bay commercial car park at 32-44 Flinders St.
While its Future Melbourne Committee last November, objected to the Flinders St development application because it was considered too big, it was keen to see the car park removed.
Finance chair Stephen Mayne said at the time: “I hope the Minister can deal with our concerns and remove a commercial car park … which is what council would like to see.”
Cr Mayne denied the council was conflicted.
He said the City of Melbourne had very little commercial car parking, particularly when compared with other capital cities.
The council’s 2012 Transport Policy spells out its position: “The City of Melbourne’s current parking policy is to limit provision of parking in residential buildings.”
Neither does the council want new residents parking in the streets.
The Transport Policy says: “It is critical that, in conjunction with this trend, the on-street parking in the city is tightly managed to ensure cars associated with these new residential developments do not use the on-street parking as a de facto private parking space.”