How Could the Expansion of UK’s Electric Car Infrastructure Impact Commercial Real Estate?

April 18, 2024

The world is changing right in front of our eyes, and the UK’s automotive sector is no exception. With the increase in electric vehicles (EVs), the landscape of our roads is transforming. It’s not just about the cars themselves, but the infrastructure required to support their usage, particularly the charging network. This shift could have significant implications for various sectors, including commercial real estate.

The Growth of the Electric Vehicle Market

Before delving into the potential impacts on commercial real estate, it’s crucial to understand the market context. As you’re likely aware, the electric vehicle market in the UK is expanding at an unprecedented rate. The transition away from traditional petrol and diesel cars towards EVs is being fueled by environmental concerns, technological advancements, and supportive policies. A key aspect of this transition is the development of a robust charging infrastructure.

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The government has made it clear that they are committed to accelerating the widespread adoption of EVs. Aiming to ban the sale of new petrol and diesel cars by 2030, they have pledged £500m over the next decade to support the roll-out of a super-fast charging network. The number of public charge points is expected to rise from around 20,000 currently to several hundred thousand by 2030.

This rapid expansion presents opportunities and challenges for commercial real estate. As we’re about to explore, this change won’t just happen on the roads – it will also transform our built environment.

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The Need for Charging Infrastructure in Commercial Properties

A robust charging infrastructure is the backbone of a functioning electric vehicle ecosystem. It’s the fuel stations of the future. And while the government is committing significant resources to developing public charging points, private infrastructure will play an equally critical role.

Commercial properties, including shopping centres, office parks, and industrial estates, are prime locations for the installation of charging points. This is because they often have ample space for charging infrastructure, and they attract a large volume of visitors who can charge their vehicle whilst carrying out other activities. Furthermore, commercial properties often have a robust electricity supply, which can support the power demands of fast chargers.

Installing charging infrastructure at commercial properties has a dual benefit. It not only supports the transition to electric vehicles but also adds value to the property. For example, a shopping centre with ample charging points could attract more visitors, increasing footfall and potentially boosting retail sales.

The Impact on Property Values and Costs

The incorporation of charging infrastructure into commercial properties is likely to have a significant impact on property values. On the one hand, properties with well-placed and ample charging facilities may see their value increase. This is due to the competitive advantage they offer to potential tenants or buyers who are increasingly seeking properties that cater to electric vehicles.

However, there are also cost considerations to factor in. The installation of charging infrastructure can be expensive, particularly for fast chargers that require more power. These costs will need to be borne by the property owner, at least initially. They may be somewhat offset by government grants and incentives, but they will still likely result in increased capital expenditure.

Then there’s the ongoing cost of maintaining and operating the charging infrastructure. This will likely be passed on to the tenant in the form of higher rents or service charges. Therefore, while charging infrastructure can add value to a property, it can also increase costs.

The Potential for Energy Grid Integration

Lastly, it’s worth considering the potential for integrating electric vehicle charging infrastructure with the energy grid. This is an emerging concept known as vehicle-to-grid (V2G) technology. It involves bi-directional charging, where electric vehicles can not only draw power from the grid to charge their battery but also feed power back into the grid when required.

Commercial properties with large amounts of charging infrastructure could essentially become mini power stations, helping to balance the grid during periods of high demand. This could generate additional revenue for the property owner, potentially offsetting the cost of installing and maintaining the infrastructure.

However, the technology is still in its infancy, and the regulatory framework is not yet fully developed. Therefore, while V2G has the potential to transform the relationship between electric vehicles, charging infrastructure, and the grid, it’s something that’s likely to play out over the coming years and decades.

In conclusion, the expansion of the UK’s electric vehicle infrastructure will undoubtedly have a profound impact on commercial real estate. From the installation of charging points to the potential for energy grid integration, it’s a rapidly evolving landscape that property owners, tenants, and investors need to closely monitor.

The Future of Fast Charging and Battery Swapping Stations

The adoption of electric vehicles is not just about having a charging infrastructure; it’s also about how quickly these vehicles can be charged and back on the road. Fast charging stations, which can recharge an EV battery in as little as 20 minutes, are becoming increasingly important.

These fast charging stations are likely to become a common sight at commercial properties in the UK. They offer a convenient solution for EV drivers who may not have the time to wait around for their vehicle to charge. Just like petrol and diesel cars can be refueled in minutes, the aim is for electric cars to be charged as quickly and easily.

In addition to fast charging stations, there’s also the concept of battery swapping stations. This is where an EV’s depleted battery is replaced with a fully charged one, with the swapping process taking just a few minutes. This concept is still relatively new, and it remains to be seen whether it will be widely adopted in the UK. However, it’s another example of how the EV revolution could change the face of commercial real estate.

When planning the layout of a commercial property, developers will need to consider how to accommodate these types of facilities. This might involve setting aside larger areas for parking spaces, or designing buildings with integrated charging hubs. All these considerations will shape the future of commercial real estate in the UK.

Optimising the Customer Experience with EV Charging

The growth of the EV market doesn’t just present challenges for commercial real estate; it also presents opportunities. One of these is the chance to enhance the customer experience. By providing convenient and efficient charging solutions, commercial properties can attract more visitors and keep them on site for longer.

Imagine this scenario: you drive your electric car to a shopping centre, plug it into a fast charger, and then go about your shopping while your vehicle charges. You might even be able to monitor the charging progress via an app on your phone. This provides convenience and peace of mind, making for a better overall customer experience.

The great advantage of this is that it keeps customers on site for longer, which could lead to increased spending. It also has the potential to increase footfall, as people choose to visit properties with good charging facilities over those without.

However, it’s important to get the balance right. Charging stations should be convenient and easy to use, but they shouldn’t dominate the customer experience. This means that they need to be well integrated into the overall design and layout of the property.

In Conclusion

The expansion of the UK’s electric vehicle infrastructure will have far-reaching impacts on the commercial real estate sector. Property owners and developers need to consider how they can accommodate charging infrastructure, fast charging stations and potentially even battery swapping stations. They also need to think about how they can make the most of the opportunities this presents, by enhancing the customer experience and increasing the value of their properties.

However, it’s not just about meeting the needs of today. With the electric vehicle market evolving at such a rapid pace, it’s also about planning for the future. Commercial properties need to be flexible and adaptable, able to respond to emerging trends and technologies.

It’s a challenging time for the commercial real estate sector, but also an exciting one. The electric vehicle revolution is here, and it’s set to transform our built environment in ways we can’t yet fully predict. So let’s embrace it, and see where this journey takes us.