HK$7.6 million—Hong Kong parking space prices hit a new record!

Release date:

2019-10-28 09:04

Source:

Parking Bang

Located on Queen’s Road Central in Central, the Central Plaza is one of the world’s most expensive office buildings, and it also houses the world’s most expensive parking space (iStockphoto).

(Hong Kong Comprehensive Report) A seasoned investor in Hong Kong recently purchased a numbered parking space at the Central Plaza for HK$7.6 million (S$1.32 million), setting a new record for the highest price paid for a parking space in Hong Kong—and possibly worldwide. This sum is more than 30 times the average annual salary in Hong Kong.

The buyer who set a new record for a parking space is Zhang Shunyi, an investor known in the real estate world by the nickname “Logistics Zhang.” The parking space he acquired is located on Level B1 of the Central Plaza at 99 Queen’s Road Central in Central. Two years ago, this landmark building in downtown Hong Kong was sold by Cheung Kong Holdings, controlled by Hong Kong’s richest man Li Ka-shing, for HK$40.2 billion, making it the world’s most expensive office tower. Zhang Shunyi, now the building’s owner, purchased the parking space for his own use.

According to reports from AFP and Bloomberg, the parking space was priced at a level comparable to that of a one-bedroom apartment in Manhattan, New York, or a studio apartment in London’s upscale Chelsea district—more than 30 times the average annual salary in Hong Kong. The asking price once reached as high as HK$8 million, but the final sale price ended up about 5% lower.

Over roughly nine months last year, Zhang Shunyi earned approximately HK$900 million by buying and selling several office floors. Pan Zhiming, Managing Director of Centaline Commercial Properties in Hong Kong, said in an interview that many owners of the Central Plaza are involved in finance or other high-growth industries. “For these tycoons, this sum is hardly a significant transaction compared with the value of the floor space they own.”

The emergence of sky-high parking‑space prices has underscored the yawning wealth gap between Hong Kong’s super‑rich and ordinary citizens. In 2016, Hong Kong’s Gini coefficient reached its highest level in 45 years—by far the highest among all advanced economies—and one in five residents still lives below the poverty line. Meanwhile, a flood of capital from affluent Chinese investors and developers has driven up commercial and residential property prices, leaving many ordinary citizens unable to afford even a decent home.

Another parking space at the Central Plaza was also sold in August this year for a hefty price of 6.35 million yuan.

Why can parking spaces in Hong Kong command such sky-high prices?

This is closely linked to Hong Kong’s rapidly growing number of motor vehicles and the resulting shortage of parking spaces. According to one set of data, between 2006 and 2016, the total number of vehicles in Hong Kong increased by 34.8%, from 552,980 to 745,677, with private cars accounting for a 48.7% rise during the same period. Meanwhile, over the past decade, the total number of parking spaces has increased by only 9.5%, or 743,000 spaces!

Furthermore, according to the Hong Kong government’s planning framework, since 2002 the HKSAR has repeatedly and substantially lowered the parking‑space allocation standards for both private residential developments and subsidized housing. It has also incorporated the average unit size of private housing into its parking‑space‑allocation criteria—put simply, the smaller the residential unit, the fewer parking spaces allocated, and in some cases, no parking spaces may be provided at all.

　　According to data provided by the Zhoushan Traffic Police, Urban Management Department, and other relevant authorities, the current vehicle stock in Putuo District stands at approximately 53,000, while the number of public parking spaces is around 7,400, yielding a ratio of roughly 7.2 vehicles per public parking space. Of these, about 5,500 are on-street or in community‑provided facilities, and the Urban Management Department has designated approximately 1,900 sidewalk parking spaces (excluding commercial‑center parking, which totals roughly 4,200). On‑street parking spaces are utilized at nearly 100% capacity, yet only slightly more than 200 of them are subject to paid parking. The primary challenges currently faced include limited public parking resources—particularly acute shortages in central areas—and relatively underdeveloped parking management. Information asymmetry prevents the full utilization of available parking capacity, while illegal parking and long-term occupation of roadways remain serious issues.

　　Accordingly, establishing a smart parking management platform that integrates all types of parking resources across the entire district has become an urgent priority for urban governance. By developing the Putuo District Smart Parking System and promoting the use of mobile apps, city‑wide guidance systems, parking‑space‑sharing platforms, and electronic payment solutions, it is possible to maximize the utilization of parking resources and optimize parking services for motorists.

　　The Putuo District smart parking system project plans to adopt a combined approach of geomagnetic sensors and high‑mast cameras. In the initial phase, the geomagnetic sensor–PDA model will be implemented in areas with high vehicle density and elevated parking‑space utilization rates, while high‑mast cameras will be installed in areas where parking‑space occupancy is low, based on actual conditions. By the end of December 2019, the construction of the Putuo District smart parking management platform will be completed. The smart parking operations platform typically includes: Parking operation management system, networked parking lot operation management system, business support system, parking guidance system, electronic clearing and settlement system, big data analytics system, public service system, data sharing and exchange system, and others; Meanwhile, by December 2019, the intelligent upgrading of 2,250 on-street parking spaces and 20 public parking lots in the central urban area will be completed.

　　By December 2020, complete the renovation of the remaining 2,600 on-street parking spaces, and gradually upgrade and integrate existing off-street public parking facilities in the central urban area— including those provided at bus stations, government service centers, and public venues such as medical institutions, cultural sites, educational institutions, sports facilities, and tourist attractions—into the unified management of the smart parking platform.

　　The District Urban Investment Group is vigorously advancing the development of a smart parking system platform, leveraging technologies such as “Internet Plus,” the Internet of Things, and vehicle‑related big data to deliver features including parking guidance, parking space reservation, parking space sharing, vacancy forecasting, and multi‑modal payment options. This aims to enable seamless parking across Putuo District through a single mobile app, creating a unified “one‑network” for parking throughout the area. By doing so, it will make it easier for drivers to locate parking facilities, identify available spaces, and pay parking fees, thereby boosting the utilization rate of parking spots, alleviating parking challenges, reducing traffic congestion caused by the search for parking, supporting the city’s efforts to become a National Civilized City, and enhancing both the livability of Zhoushan and its urban transportation environment.

　　The project’s total estimated cost is RMB 60.06 million (as approved by the National Development and Reform Commission), comprising RMB 55.72 million for engineering works, RMB 1.48 million for other project construction expenses, and RMB 2.86 million for contingency funds.

　　The Phase I construction investment totals approximately RMB 19 million, with system platform costs accounting for about RMB 6 million and hardware and operator service expenses around RMB 13 million. The smart upgrade cost for geomagnetic sensors plus PDAs is roughly RMB 1,450 per parking space, while the smart upgrade for high‑position video systems amounts to approximately RMB 3,300 per parking space. The smart transformation of an unattended parking facility entails a cost of RMB 74,000 per parking lot or garage.

　　At present, the first-phase site‑selection has been finalized, and the tender documents have been prepared. The tender announcement is expected to be published this week. Promotion of the parking‑app has already commenced, with relevant marketing materials currently in production. The “Implementation Opinions on Smart Parking Development in Putuo District” is undergoing internal review at the District Government Office, while the District State‑Owned Assets Administration has approved the establishment of Zhoushan Yibo Parking Management Co., Ltd.; the formal issuance of a corresponding document by the State‑Owned Assets Administration is pending, and preliminary business registration has been completed. A draft of the “Putuo District Public Parking Management Measures” has been submitted to the relevant authorities.

Should urban parking be free? If it is to be charged, how should it be implemented?

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