To outsource or not to outsource?
Published: 23 September, 2010
Few shopping centres run their own car parks but it is becoming more common. Should centre owners consider taking the management of their car parks in-house? And what are the benefits of doing so?
Town Centre Securities, owner of the Merrion Centre in Leeds, has recently chosen to run the centre’s car parks itself through its subsidiary Town Centre Car Parks instead of renewing the contract with the previous operator Q-Park. The move is an unusual one. So what are the benefits of landlords running their own car parks? And is outsourcing management often more suitable?
Town Centre Securities hopes that TCCP’s management will facilitate the modernisation and refurbishment of the 1,050-space multi-storey car park as well as making its pricing structure more flexible, reflecting the needs of shoppers, tenants and other commercial users at the centre.
Helen Beckett, associate director at TCS, explains: “We believe that TCCP are excellent car park operators, with strong management, high levels of customer care and a commitment to providing a secure, clean and safe environment. TCCP has an objective to grow and expand through the acquisition of freehold or leasehold sites and management opportunities and Merrion is the latter.
“By appointing a sister company to run the car park we can work together to deliver the best and most flexible solutions to the Merrion car park and Merrion Centre. For example we can work together on pricing and promotion activities.”
And she adds: “As shopping centre landlords we appreciate the car park is effectively a key anchor of the centre and thus being able to work together is vital to a centre’s success. Similarly, the Merrion Centre incorporates circa 250,000 sq ft of office accommodation and having control of the car park enables us flexibility to offer additional facilities to our office tenants too.”
Nigel Young, APT Skidata’s business development director, explains why choosing the correct people to manage your car park is so important. “More often than not car parks are managed independently of the centre,” he says. “But the industry needs to move away from the idea that the car park is merely a place for the customer to park their car for the duration of their shopping trip.
“It is not uncommon for the car park to be a better revenue generator than the anchor store, especially in new centres with heavily negotiated rents. There are few centre managers, however, that fully understand how a car park can be leveraged as potentially their greatest asset.”
Capital Shopping Centres, owner of 13 shopping centres including MetroCentre, Lakeside and Manchester Arndale, chooses to manage all its car parks internally so that it can control standards.
Bob Tingle, director of operations at CSC, says: “We choose not to outsource the management of our car parks. However, we do utilise the skills of our FM service partners to ensure that the high standards of security, cleaning and customer service we enjoy on our malls are also present in our car parks.
“We work closely with our FM service partners to define the standards they provide in our actual shopping centres so it makes sense to transfer the same standards into the car parks.”
Target Parking manages over 450 car parks across the UK. CEO Emma Sinclair says the list of benefits of outsourcing car park management is endless. “If there are excess staff at a shopping centre, it’s not impossible to run the car park internally but at times there are a lot of reasons why outsourcing is more suitable,” she says.
“Different sites have different needs and if you have a problem in life you go to someone who knows what they’re talking about. We have the know-how and we can give advice about equipment.”
Sinclair says that a lot of managers running shopping centre car parks internally tend to buy equipment direct from the supplier and warns that suppliers are “plying their wares” whereas independent operators can act as impartial advisers.
Target Parking makes sure any problems with machinery is dealt with within 24 hours and some of its staff even carry tools and jump leads so that they are best equipped to deal with any problems on site. It can also offer good deals by liaising with sub-contractors. As Sinclair explains: “We can approach our partners to get competitive rates. Similarly, we offer insurance that is equal to or above the requirements.”
