The surge in demand for electric vehicles (EVs) across Europe is not just transforming the automotive industry; it’s also opening up novel opportunities for real estate landlords and investors. This trend is particularly pronounced in Germany, France, Sweden, Norway, and the UK, which are at the forefront of this shift.
The Growing Need for EV Charging Points
A recent study by Savills highlights an urgent need for more EV charging points in these five countries. These nations collectively require 77% of the new chargers needed in Europe within the next two years. The demand arises from a combination of factors:
- Large Populations and High EV Demand: In Germany, the UK, and France, the push for more charging infrastructure is driven by their substantial populations coupled with an increasing preference for EVs.
- High EV Ownership with Limited Infrastructure: Norway and Sweden, despite their smaller populations, have a high number of EVs per capita but lag in charging infrastructure.
Country-by-Country Analysis
Savills’ research offers a detailed breakdown of the current landscape and the expected needs by 2025:
- Germany leads with a need for 409,303 additional chargers.
- France requires 135,974 more chargers.
- Sweden and Norway follow with 80,378 and 103,340 additional chargers, respectively.
- The UK needs 175,883 more chargers to meet the growing demand.
These figures take into account various factors like off-street parking spaces, current EV fleet size, and electricity generation per capita.
Opportunities for Landlords and Investors
This gap in EV infrastructure presents a lucrative opportunity for real estate investors and landlords. They can partner with private charging point operators (CPOs) to install new charging stations. These partnerships can yield several benefits:
- Rental Income: Landlords can expect to earn between €1,000 to €5,000 annually per charger, with lease lengths spanning 20-25 years.
- Increased Footfall: The presence of charging stations can attract more visitors to nearby properties, enhancing revenue opportunities.
Market Insights and Expert Opinions
Savills’ experts shed light on the market dynamics and future prospects:
- Tristam Larder, Head of European Capital Markets at Savills, emphasizes the importance of public infrastructure for EVs, especially for users without home charging points. He notes the potential for landlords to monetize underutilized parking spaces.
- Bobby Barfoot, Senior Surveyor in Savills Automotive team, points out the automotive industry’s commitment to electrification and the consequent need for supportive infrastructure.
- Lydia Brissy, Director in Savills European research team, acknowledges the challenges, such as grid capacity and upfront costs, but remains optimistic about the collaborative potential between CPOs and landlords.
The Challenges
While the opportunities are significant, landlords and investors must deal with challenges like grid capacity and the substantial upfront costs for grid reinforcement and connection. However, by collaborating with CPOs, these hurdles can be addressed, paving the way for shared risks and rewards.
Conclusion
The rise in EV demand in Europe, particularly in Germany, France, Sweden, Norway, and the UK, is more than just an automotive trend—it’s a transformative force in the real estate sector. For savvy landlords and investors, this represents a chance to not only contribute to a greener future but also to tap into a new source of revenue and property value enhancement.