Parkin IPO: How Dubai’s Parking Fees, Fines, Zones Could Change

Parkin IPO: How Dubai’s Parking Fees, Fines, Zones Could Change

As Dubai’s economy continues to expand, mobility and the transport sector are also expected to keep pace. This means more vehicles on the road and correspondingly, an equal demand for more parking spaces across the city.

Parkin PJSC – the sole operator of public parking spaces across Dubai – noted when it announced its initial public offering (IPO) on the Dubai Financial Market late last month that demand for parking space in Dubai is expected to grow by 60 per cent by 2033.

Developing new paid spaces to meet the demand is among the key growth drivers for Parkin. Another growth opportunity is to effectively implement tariff optimisation which means reclassifying tariff zones based on occupancy rates in certain areas.

Will there be more paid parking spaces?

Yes and premium zones could command higher parking fees. Parkin also said it will “explore multiple opportunities to expand current agreements and establish new ones with private developers across Dubai as the city expands.”

Will areas that currently enjoy free parking become paid?

A senior official from the Roads and Transport Authority (RTA) earlier told Khaleej Times that all areas that currently enjoy free parking will remain free at the moment and the decision to make them paid will be under RTA.

The deciding factor to make these free parking areas a paid service is based on supply and demand. Ahmed Hashem Bahrozyan, chairman of Parkin’s Board of Directors, said implementing paid parking is dependent on the demand. “If a certain community or area grows and there is a need to have paid parking to (regulate supply and demand), we will study to implement paid parking services.”

Will there be parking fee adjustments?

There is also a well-defined mechanism to protect Parkin against future inflation impacts, requiring the Company to formally request a tariff adjustment every two years to reflect the cumulative impact of inflation.

The Executive Council of Dubai, meanwhile, has the authority to approve any requested changes in tariffs to ensure that any revisions protect investors and are aligned with Dubai’s social goals to protect customers.

Parkin has a 49-year concession agreement with the RTA that gives the company exclusive rights to operate all paid public on-street parking; off-street parking; and public multi-storey car parks. Parkin pays RTA a quarterly concession fee equal to 20 per cent of the company’s revenue generated from paid public parking in Dubai, subject to inflation-linked adjustments.

As part of the concession agreement, “Parkin has the right to submit requests to the RTA to accelerate the launch of new parking facilities within existing and developing areas with increased activity in Dubai.”

Will electric vehicle (EV) owners soon have to pay for public parking?

Parkin PJSC said it is “exploring opportunities for monetisation in the EV sector.”

Currently, there are public parking spaces allocated for free for EVs for a limited time. These parking spaces – painted in green to signify its exclusive use for eco-friendly vehicles – can only be used for a maximum of four hours at a time.

Parkin said the study to explore opportunities for monetisation will be done in collaboration with RTA and Dubai Electricity and Water Authority (Dewa).

The demand for EV parking is on the rise as Dubai has seen a notable increase in the use of EVs since 2015. As of last year, 25,929 electric cars were registered for Dewa’s EV Green Charger programme, as compared to only 14 back in 2015.

Will Parkin also operate in malls, airports and new development areas?

Yes, Parkin is looking into expanding its services to privately owned companies and developments, including shopping malls, airports, and other high-traffic facilities

Bahrozyan said: “We are planning to expand to private developments and properties as part of our expansion plans. We have about 30 years of experience and end-to-end solution. We have the right to compete for parking services at malls and other private developments.”

Parkin has a 49-year concession agreement with RTA to manage and operate “all existing and new public parking facilities in Dubai.” It operates about 179,000 paid public parking spaces and it has seven contracts with private developers to manage approximately 18,000 parking spaces, “with significant potential for expansion in existing and developing areas.”

Parkin CEO Mohammed Al Ali said the company is highly capable “to expand operations at shopping malls, given that Parkin is managing 91 per cent of all (public and private) of Dubai’s parking operations.”

Bahrozyan, however, clarified that the decision to implement paid services in shopping malls or hypermarkets will remain with the property developers. “If malls want to charge for parking or (make the service) remain free, it will be the decision of their management.”

How will Parkin improve fines collection?

The company has digitised surveillance and enforcement, including the roll out of smart parking inspection scan cars and smart parking lots.

About 23 per cent of Parkin’s revenue is generated from enforcement and collection of fines. It had a 99 per cent collection rate on fines issued to UAE vehicles in 2023. The company said it will invest in technology to “further expand enforcement capabilities to increase customer compliance”.

Al Ali noted 90 per cent of Parkin transactions are digital. It offers six payment channels, including parking metres and payment via RTA App; AppClip (via QR code); WhatsApp; seasonal parking cards and SMS. Parking payment can also be done on ApplePay, as well as Nol, debit and credit cards and cash.