VALUATION OF…
Airports
Specialised aviation infrastructure, valued primarily on trading income and profitability, cross-checked against the depreciated replacement cost of runways, terminals and airside infrastructure.
Content status: Methodology and Caselaw — Market Information (evidence log) is added incrementally.
Methodology
Airports are specialised, income-producing infrastructure assets typically valued using the Profit Method — a trading/profits-based approach — rather than direct comparison, since sales evidence for operating airports is scarce and each asset’s value is driven substantially by its trading potential rather than by land and improvements alone.
The Big Five framework is adapted accordingly: the Income Generating Units are the runway and apron system, the terminal building, and non-aeronautical facilities such as retail, parking and cargo handling; ‘contract versus market’ income is reinterpreted as aeronautical revenue (landing, parking and passenger charges, often regulated or contractually fixed) measured against non-aeronautical revenue (retail, advertising, car parking, property rental), which typically carries the greater upside and risk; and the discount or capitalisation rate applied reflects passenger-traffic risk, regulatory constraints, and the highly specialised, illiquid nature of airport assets.
Because operating income can be volatile and difficult to stabilise (traffic shocks, route changes, single-airline dependency), a Depreciated Replacement Cost cross-check of runways, terminal buildings and airside infrastructure is commonly used to sense-check a profits-based valuation, particularly for smaller or non-hub airports where trading history is thin.
Where an airport’s equity or shareholding — rather than the underlying property itself — is being valued, for example on an acquisition, disposal, or dispute, the basis of value chosen (asset value versus operational/going-concern equity value) materially affects the outcome. See the Caselaw section below for a worked example.
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 Airports — 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.