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Macau Business DRIVERS IN A JAM

CAR PARKING SPACES HAVE BEEN DECREASING. BUT PENALTIES FOR ILLEGAL PARKING ARE ROCKETING. CAUGHT IN THE MIDDLE, CITIZENS ARE STARTING TO VOICE THEIR CONCERNS. AFTER ALL , THEY CLAIM, ONLY THE “STATUS QUO” AND THE PARKING INDUSTRY BENEFIT

DRIVEN TO DISTRACTION

While some drivers suffer from the government’s initiatives in tackling parking space problems in recent years, the private parking spaces and the parking management industry has risen on the coattails of these measures

It is the second time Mark, an office worker in his twenties has joined a local protest. The first time was four years ago.  lambasting a lavish retirement package bill floated for outgoing officials; this time he took to the streets to complain about the city’s management of car parking spaces.

He joined thousands of residents marching on the streets in mid-June voicing their dissatisfaction with the government’s policies, forcing officials to shelve a public consultation exercise days before the scheduled protest on the revision of the road traffic law poised to raise several fines for illegal parking.

“What the government has done in the past few years, raising public car parking tariffs and cutting the number of parking spaces on the streets, is unreasonable,” says Mark, who says he has to search for half an hour to find a parking space in the Inner Harbour area every night.

“We also don’t want to break the law but there aren’t enough parking spaces. These [measures] just make [private] parking more expensive, benefiting the status quo,” he says, as his fellow protestors hold banners and signs proclaiming:  ‘Against  [the government] profiteering from residents while rewarding business interest!’

What Mark and other protestors have expressed is not far from the truth: while it is arguable whether the government implements parking policies for the benefit of the status quo, both private parking space owners and the parking management industry have enjoyed ever more lucrative revenue in the past few years as a result.

According to calculations based upon government figures, the price of a parking space for both automobiles and motorcycles averaged more than MOP1.53 million(US$191,250)last year, nearly quadrupling from the MOP394,726 of 2011 A parking space fetched as much as MOP1.7 million in 2015, the highest annual average price on record.

Uneven distribution

Chan Lik Ki, General Manager of Carparking Co Ltd., an agency specialising in the sales and rental of parking space in the city, attributed the hike in the price of private parking space in recent years to the cooling measures applied to the housing market and various new measures affecting parking management.

“Parking space has been more popular among investors in the past few years,” said Mr. Chan.”Whenever the government introduces new parking management measures, such as raising the tariffs for public parking lots and scrapping the monthly rental scheme for public car parks, the value and rents of parking space will go up given the shortage.”

According to figures provided by the government earlier this year there are about 126,000 public and private parking spaces for cars in Macau, including over15,000 units in public car parks and 11,000 metered parking spaces ,compared with over 106,600 automobiles. There are about 60,000-70,000 parking spaces for over 124,600 motorcycles.

MOP584.5 million Projected total revenue for public car parks in 2021

While supply is greater than demand for cars on paper, drivers complain that parking spaces are not evenly distributed across the city with a particular shortage on the Peninsula.

Mr. Chan highlighted that car parking spaces in the northern district have been highly sought after by users, given the lack of parking lots in many residential projects there. The monthly parking rent for cars in the Border Gate area now fetches MOP3,450, the highest region in the city, while the rental level in Toi San and Fai Chi Kei ranges between MOP3,150-3,200,  according to CarparKing. In areas where there are more parking spaces, such as Taipa and Nape. The current rental level is about MOP2,400  and  MOP2,250  a month, respectively.

One after another

The parking space specialist expects the price of car parking spaces to rise 20 per cent this year from the current level of MOP1.8 million each, while the value of motorcycle parking spaces will surge by half from the current MOP350,000.

“Due to the shortage of motorcycle parking spaces and the hike in toll charges for illegal parking this year, this [type of property] has better upward momentum,” he explains.

Since February of this year, the government   has upwardly    adjusted the charges for parking vehicles on the street to that charged by public car parks. It is one of the latest moves by the authorities in recent years to tackle parking spaces and thus rein in the overall growth of vehicles. The government also increased several fines for illegal  parking  last  year, after  gradually increasing the tariffs of public car parks  and  metered  spaces  during  the 2015-16 period.

“The government clearly knows about the shortage and the uneven distribution of parking spaces here, but it has still raised the relevant penalties and charges,” says legislator Antonio Ng Kuok Cheong. “This indirectly pushes up the price of private parking spaces, leading to the public perception of the government doing favours for business interests.”

“If the Administration can’t find any successful way of resolving   the local traffic problems why doesn’t it limit vehicle imports to truly curb the growth in the number of vehicles?” he logically asks.

On the rise

The   government’s latest  initiative   in tackling  parking spaces  not only helps push  up  the  price  of  private  parking but benefits the parking management industry. The listing prospectus of Ma­cau CPM Holdings, which controls one of the largest parking companies here, CPM – Macau Parking Company  Ltd., paints a picture of the industry  that the public apparently  knows little of.

A document filed with the  Hong Kong Stock Exchange in late May reveals that revenue from the parking management business of Macau CPM reached MOP96.17 million last year, up 6.8 per cent from a year ago and 77.1 per cent from two years prior. The company, linked to the family of prominent local entrepreneur Ma Iao Lai, explained that the surge of revenue in these two years is due to the increment of public car park tariffs approved by the government in December 2015 and March 2016, respectively Describing   itself   as   the biggest player in the parking management industry, Macau CPM now manages 14 public carparks: eight carparks with concessions ending in 2049 and six carparks  with six-year concessions  granted in May 2018.

‘The  parking  management  industry in Macau is relatively concentrated with the top five players  occupying about 68.7 per cent of the total market share in terms of revenue and 65.1 per cent in terms of the total number of car parks operating  in 2016,’ the document notes.

‘Our results of operations are affected by the number  and availability of parking spaces and tariffs  of our car parks, which depend greatly upon Macau [Government] policy,’ Macau CPM added. The company did not immediately respond for comment on this story.

More car parks

Marketing  research   firm    Frost   & Sullivan also  agrees  with  this   perspective ‘The  gradual  increasing  supply of public parking  spaces  during  the  past few years and the surging prices of private  [car parking]  spaces  have supported  the steady  growth  of the parking management service industry,’ said the firm in the document.

It estimates that overall market revenue totalled MOP460.2  million in 2016 – more than doubling from MOP222.3 million  in 2012 – and expects revenue could reach MOP584.5 million  by 2021. ‘The [Macau Government] encourages real estate developers to incorporate parking  spaces  [in] new establishments while [it] is also actively  trying  to … look  for available  land  for  new  public  carparks,’ the marketing  firm noted.

Currently, 46 public parking lots in the territory provide about 15,000 parking spaces, according to the Transport Bureau. Director Lam Hin San said in June that there will  be at  least  4,000 new parking spaces this year, including about 3,000  spaces in a public parking lot in Ilha Verde. The government also plans to shrink the number of parking spaces on streets in the  area,  where there is a low usage rate of public carparking, he added.

‘[The government’s] initiative in  solving   the  parking   space   problem  will  drive  growth  in  the  market [of parking management],’ Frost & Sullivan  concluded.

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