<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>Andrew McNeal, an expat working in Bangalore, travels 20 km every day to his office in Electronic City from his residence on M.G. Road. Often, to avoid evening rush hour traffic, he parks his car on Level 4 of the Forum Mall and visits a coffee shop. "I get to catch up on my reading, but more importantly, my car gets washed at the parking lot," says McNeal who pays Rs 500 per wash. With malls trying hard to woo customers, parking services such as these are becoming an important element in retail operations as better parking facilities translate into higher footfalls.<br><br>Little wonder parking is now serious business and involves a lot more than just a scruffy lad handing over a ticket as one leaves the parking lot. On offer is a range of services from manning of the parking bays to valet parking and even data analysis on the number of people visiting a property and the number of hours spent there. "Parking has to be the least of the worries for someone on his way to work or when he goes out with his family," says N. Sathyanarayanan, CEO and founder of Central Parking Services, a Rs 55-crore turnover company that manages 30,000 parking bays in 90 malls and five airports across 27 cities in India.<br><br>The size of the parking market in India is estimated to be around $300 million and growing at 30 per cent each year. Of this 90 per cent is unorganised and in the hands of local contractors, leaving the organised parking market at only around Rs 150 crore. However, this presents a significant opportunity for a player with the right systems and technology in place. <br><br>Consider this: India has over 100 million registered vehicles. Last year alone, 2.4 million cars were added to Indian roads and auto companies estimate sales to increase to 6 million units a year by 2018. "There exists a significant need for parking management in India given the explosive growth in car ownership, resulting in traffic congestion, limited availability of urban land and consequently scarcity of parking," says Raghuveer Mendu, general partner at venture capital firm VentureEast, which invested $5.5 million in Central Parking Services in 2010. "The business is disorganised and is handled by small operators; it has the potential to be a large business," says Mendu.<br><br></p>
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<td><span style="color: #003366;"><strong>"We are in talks with various city municipalities to build parking lots in congested areas"</strong></span><br><span style="color: #333300;"><strong>N. Sathyanarayanan, CEO and founder, Central Parking Services</strong></span><br>(BW Pic By Jagadeesh N.V.)</td>
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<p>And it is this potential that drew Australian firm Secure Parking into setting up shop in India in 2008. "With more cars and two-wheelers, the need for organised parking will only be much greater," says Arvind Mayar, managing director of Secure Parking India. "Parking is not a commodity and the service element is what we want to bring to India." The company handles over 10,000 bays spread across 105 car parks in Delhi, Bangalore and Mumbai.<br><br>Giving it competition is Malaysian company Tenaga Parking that came to India a year before Secure Parking and operates over 20,000 bays in shopping malls, airports and hotels, mostly in Delhi/NCR. The company, which has a turnover of Rs 10 crore, also handles the parking at the Hyderabad international airport.<br><br>A spokesperson from DLF Promenade, a mall in Delhi which uses the services of Tenaga, says that the company's professional handling of parking allows the mall management to not get entangled in the peripheral-yet-important issue of parking facilities, and instead focus on the shoppers. <br><br><strong>Choice Of Models</strong><br>Different business models are fast evolving in the parking market. Under the first and most prevalent model, contracted staff handle basic collection of parking tickets. There is no revenue share and they are paid a fixed fee. The second model is an extension of the first with revenue sharing, joint ventures, parking technology, data analytics, security barriers and electronic tickets coming in. The parking company either gets a percentage of collections or is contracted to maintain a parking lot for a minimum of four years. Malls depend on their expertise, their ability to secure and provide trained staff, equipment and systems.<br><br>Under the third business model, parking firms provide design and consultancy services to builders before a project is launched. Central Parking, Secure Parking and Tenaga use all three models, but earn maximum revenues under the first model. <br>According to retail experts, there are specialists in all facets of mall management and parking management is one such area of specialisation. "Good parking increases footfalls in airports and malls," says Sathyanarayanan. He says that builders have finally woken up to the fact that parking is more of a science than labour arbitrage. There is a return on investment involved in parking and it determines the success of a property.<br><br>break-page-break<br>In fact, one of the big reasons behind why many malls in India have failed miserably is because there was no proper handling of parking. "Parking is an integral component of any well- managed mall. It should not be seen as a mere ‘plug-in'. It is an element of construction required for planning approval," says Jonathan Yach, CEO of Mantri Square Mall in Bangalore. A mall with a well-designed parking garage benefits both customers and tenants.<br><br>Most malls in India have revenue share agreements with parking companies where the parking company pays 7-10 per cent of all the collections to the shopping centre. However, some malls invest in the technology of parking and bring in a parking firm on a management contract. "Parking forms a very small portion of the overall revenues of the mall, so it makes sense to outsource the business," says Pinaki Ranjan Mishra, national leader, consumer markets, at Ernst & Young. But Mantri mall's Yach disagrees: "Parking revenues are an important source of income for any mall owner and manager. The trick though is to ensure that as much parking is provided as possible." <br><br>BOOT (build, operate, own and transfer) is emerging as a model across suburbs and airports in India. "We are in talks with various city municipalities to build parking lots in congested areas," says Sathyanarayanan. Within the next 48 months, at least 12 multi-level car parks are expected to come up in Bangalore alone. In Hyderabad, Apollo Health City is building a multi-level car park to accommodate 500 cars.<br><br></p>
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<td><span style="color: #000080;"><strong>"With more cars and twowheelers, the need for organised parking will only be greater"</strong></span><br><strong>Arvind Mayar, managing director, Secure Parking India</strong><br>(BW Pic By Umesh Goswami)</td>
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<p>Currently, all parking companies are in talks with IDFC and IL&FS to become financial partners in building multi-level car parks. Here the financial partner will hold a 90 per cent stake in the project and 10 per cent will be owned by the parking company. An EPC (engineering and procurement company) will be brought in to complete the project. "The aim of public parking should be to decongest cities and not to create a retail play in the property, as it congests the city and does not serve its purpose," says Sathyanarayanan.<br><br><strong>The Business Of Parking </strong><br>Setting up a parking lot for around a 1,000 cars costs nearly Rs 1 crore, of which Rs 70 lakh goes towards the technology (sensors, cameras and security systems, parking software, etc.) while the rest is used to put up signage, speed breakers and ground-level offices, etc. Besides the fixed costs, the major operating expenses for these companies include staff salaries, training and maintenance.<br><br>On an average, 45 people are employed in the parking space of a 1.2 million sq. ft mall. But some malls rely more on technology and less on people. For instance, the Number One MG Road mall in Bangalore has completely auto-pay stations, and employs fewer than 20 people in the parking lot.<br><br>On the revenue side, on average, a mall charges Rs 20 per hour, which goes up to Rs 50 on weekends. So if a mall has 1,000 bays and 800 of them are occupied for eight hours every day, the parking company will earn a revenue of Rs 128,000 daily. On an average a parking company nets 9-10 per cent profit after tax. "If the mall or airport is successful, we make our money," says Mayar of Secure Parking.<br><br>While malls may be more prevalent, airports is where the big business is since the value of the collection there is much higher. The average parking cost at most metro airports is in the range of Rs 60-100 per hour, while it is Rs 30-75 at high-end malls (full-day parking charges are in the Rs 300-1,000 range at airports). So, it is not surprising that at least 50 per cent of the business for the parking firms comes from airports, about 45 per cent from malls and shopping centres, and the rest from institutions.<br><br>India's booming economy has over the years greatly increased the need for parking with the number of retail malls, airports, hospitals and density in large apartment buildings increasing vastly. While there is still a lot to achieve in this business, making it more organised is a step in the right direction. <br><br>vishal(dot)krishna(at)abp(dot)in<br><br>(This story was published in Businessworld Issue Dated 14-05-2012)</p>