15,000 vehicles passing daily, wifi, coffee, and toilets. If you can establish an 800 KVA power connection at a site with these criteria, then you can establish a successful electric vehicle charging hub. More often than not, Garden Centres are there or thereabouts.
When was the last time you planned where you are going to fill your car up with petrol? Consciously thinking about refuelling your internal combustion engine vehicle ultimately comes down to the cost of petrol and diesel. It is not a case of where or when, drivers are confident they are always in the vicinity of a petrol filling station and they know there will be a pump available immediately or within five minutes of arrival.
Presently, zero emission mobility is a little trickier. If you drive a Battery Electric Vehicle (BEV), you are in the 5% minority of the 34 million cars navigating the UK road networks and you may need to plan more meticulously. According to Which?, 74% of those using public charging infrastructure are dissatisfied and 48% of drivers express difficulty in finding a functional charging point. To facilitate growth, the UK government estimates that tenfold expansion will be required by 2030 with 300,000 public charging locations needed.
There is desperate need for real estate for electric vehicle charging, and Garden Centre car parks can generally meet the required criteria.
How can landlords benefit?
Returns are increasing and are often location dependent but rents paid by EV charging point developer operators (CPOs) are currently tending to range between £2,000–£4,000 per charger per annum in rental income typically for a term of 20–25 years. In addition is an index linked rent review often cap and collared at 1–3%. This is a drastic improvement on earlier returns a couple of years ago, and there is evidence of some rents reaching £5,000 per charger per annum in strong locations. Over the term of the lease, landlords could expect a return between £900,000 and £1,250,000 for 8–15 car parking spaces (EV charging points generally take up four car parking spaces for every three chargers).
Other lease structures exist. For instance some CPOs offer a base rent of £1,000–£1,500 per annum per charger with index linked 1–3% review, plus a 10–15% gross profit share. Whether this option will be more beneficial to a landlord requires an assessment of the business. According to a market leading CPO Osprey Charging Network, charging hubs achieve 14 charges per charger per day on average, although performance data suggests that the best sites are achieving 20 charges per charger per day. The CPO turns over between £9–£19 per charge based off the sale of electricity. In order to calculate the gross profit, the CPO would subtract the cost of installation the electricity from the DNO plus initial instillation and upgrade costs and minor operating costs such as customer payment software. Whilst landlords therefore absorb some of the performance-based risk, where the CPO has an annual turnover of over £1 million per site, this could be a more fruitful structure for them – and as the EV market expands so more strongly performing sites will emerge.
