VALUATION OF…
Air Rights
Development rights above an existing structure or site, valued on the residual value of the additional permitted bulk.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Air rights are valued primarily using the Residual Method, deducting the cost of constructing the additional permitted floor area (and any strengthening or access works to the existing structure) and a developer’s profit from the gross development value of the additional bulk.
The Big Five framework does not apply directly to air rights, as there is no existing income stream to analyse — instead, the valuer must confirm the additional bulk is legally permitted (via title conditions, servitudes or zoning rights), assess construction feasibility and cost, including any disruption to the existing building, and apply a developer’s margin appropriate to the additional risk and complexity of building over an occupied structure.
Because sales of air rights alone are rare, a Direct Comparison cross-check is generally not available; the Residual Method result should instead be tested for reasonableness against achieved rates for comparable completed developments in the same node, net of the assumed construction and profit deductions.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Air Rights — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.