Autonomous Cars and Property
I read an article today on Linked-In that suggested Autonomous Cars will be wide spread within 6 years. Maybe its 10-15 years, but there are certainly some major changes coming in the auto industry that will have big impacts for the Property Industry.
Some of the impacts on property will include –
New Commercial Office Developments – The requirement for car parking will be dramatically reduced and ultimately may not even be required in some commercial development. This will add lettable and useable floor area to new projects.
Existing Commercial Office Buildings - Existing car park levels can be converted into income producing lettable space. Of course this will depend on floor to floor heights and BCA compliance, but a huge opportunity for additional income will emerge.
Retail Shopping Centres – Currently retail shopping centres require large tracts of land area to accommodate car parking. With 50% site coverage being predominately car parking areas, the reduction of required cars will increase the viability of shopping centres by reducing required land area and increasing the ratio of lettable area to land area (plot ratios)
Residential Apartments – It won’t mean that individuals do not own self driving cars, but it will mean that car ownership will become a thing of prestige rather than a thing of necessity. As such, car ownership will become more and more the domain of the wealthy. This will greatly reduce the car parking requirements in the mid-range apartment market and as with shopping centres, will improve the Plot Ratio and hence viability of projects.
Residential Houses – As with apartments, car ownership will become more the domain of the wealthy and as a sign of success. Many first home buyers and investor homes will not have garages. This will allow for smaller land and house sizes which will help improve affordability.
Space Saving – In a standard car park that is relatively efficient, as a rule of thumb, each car requires 30m2 of land area once you include driveway space. In inefficient car parks and basements this can increase to 40m2 or more.
To give you an idea, in commercial terms 30m2 of lettable area in Brisbane CBD could be in the order of $500/m2 net rent if well located, and could yield in the order of 7% to 8%. That is a capital value per car of $187,500 to $214,000 that could be returned to the developer.
But the WORST thing about autonomous cars….our children or grandchildren won’t have to go through the torture of trying to teach their kids to drive.