Volumetric Title Valuation on Air space Railway Station Development

Abstract

Queensland government promotes Transport Oriented Development (TOD) by providing higher density incentives to optimise development in the transit nodes such as regional centres, major bus stations and railway stations. In the Brisbane city fringe areas, mixed use development has been promoted in the surrounding railway station as well as above the railway lines. The right to develop space above railway line is recognized as utilising air space or volumetric lot development.

This paper discusses challenges in relation to volumetric title as well as relevant valuation methodology used. A case study in Cooparoo railway station development in Brisbane, Queensland, Australia is discussed to highlight differences between standard lot subdivision and volumetric lot subdivision.

Although air space considered as idle asset and may be utilised, it is an expensive development exercise. In the case study, two development options have been reviewed included volumetric title as one option. The land development exercise utilised hypothetical development method using land residual technique (static or discounted cash flow analysis) as the primary valuation methodology and market comparable sales a checked method. In conclusion, without significant land shortage and higher density and maximum height incentives, this study has confirmed that volumetric title development is not viable option.