The sky’s the limit really is the case when it comes to air rights. While we often associate value with land or buildings, the air space above can prove incredibly valuable, especially as development opportunities remain scarce.
Once a party owns a ‘freehold in occupation’ of prime land in a key location the commercial logic of exploiting its upward development potential may not always be that obvious or simple. However, with little opportunity to grow outwards or even down, it would seem that the only way is up.
One example of this is The Army & Navy Club on London's Pall Mall. The historic site has a strong need to retain its presence in a location where space for development is extremely limited. The dilemma is how do you keep hold of your roots, while also planning for the future and the next generation of members? The solution is air rights. As a result, the club will undergo a full redevelopment which will, for the most part, be funded by the creation of an office complex that will sit above the existing building. This demonstrates how with a little bit of innovation you can exploit opportunity in the least likely of places.
However, air rights are not limited to super prime locations. UK retailers hold significant amounts of land in some of the most desirable places. Typically situated centrally with excellent communication links, they often find themselves in the very place that house builders covet. Retail operators, aware that they do not need the space above the stores for their own operational use, are cashing in on the demand for affordable housing by using these rights to sell off valuable ‘air’ to developers wanting to take advantage of prime sites for residential use.
Ultimately, air rights provide limitless opportunity across the UK. The advances in green roof technology and light weight modular housing design have opened up the potential for innovative development in some of the country’s most highly desirable locations. All it takes is a little blue-sky thinking.