A rapid rise in the number of electric vehicles across Wales presents an opportunity to support high street and out of town retail, and an additional income stream for landlords, according to the latest research from Knight Frank.
The number of Ultra Low Emission Vehicles (ULEVs) registered across Wales, the vast majority of which are Electric Vehicles (EVs), rose by 49% in a year during 2020, up from 4,895 in Q3 2019 to 7,327 in Q3 2020.
By the end of Q3 2020, Swansea had the most ULEV registrations in Wales at 1,176, followed by Cardiff with 822. Bridgend was third highest with 551.
The increase in the adoption of electric vehicles provides both a challenge and an opportunity for real estate owners.
Retailers have been adapting to a structural shift towards e-commerce and have been amongst the hardest hit by the pandemic restrictions, but shopping centres and retail parks could be amongst the winners from the growth in electric vehicles. The need to charge electric vehicles provides an incentive for EV drivers to visit and spend time at locations where fast and rapid charging points are available, which for retailers could help to support out-of-town shopping centres and retail parks. Customers charging an electric vehicle spend up to 50% longer at a retail site, which in turn translates into average increased spending of up to £80, according to RetailCo Solutions Inc.
Charging points can also provide a new revenue stream for landlords, with TfL currently estimating that new fast and rapid charging points pay for themselves within 5-7 years on average. With occupiers and investors increasingly focused on ESG and achieving Net Zero, having significant electric vehicle charging infrastructure also helps landlords to ‘future-proof’ assets.
Matthew Phillips, Head of the Cardiff office of Knight Frank, comments: “We are seeing a significant rise in the adoption of electric vehicles across the UK, both by individuals and by businesses via their car fleets. This is a very positive shift for the economy as the Government looks to progress towards its Net Zero objectives in a crucial year, with COP 26 due to take place in November.
“As battery capacity increases, technology allows faster, more powerful charging points to become available, and the 2030 legislation looms closer, drivers will become increasingly inclined towards electric vehicles.
“However, this growing demand for electric vehicles requires much greater quantum and variety of charging points nationally. Across all kinds of real estate, from residential and retail to logistics and commercial offices, there is a shortage of charging points and a growing need for investment. As the shift to electric vehicles continues to gather momentum real estate asset owners need to consider now whether or not their assets have sufficient EV charging infrastructure to meet current and future occupier demand.”