Concrete Analysis | Land premium uncertainty discourages building of footbridges
No one doubts the benefits of these links, but landlords will remain wary of the costs in the absence of a fairer approach
When it comes to land premium, it is sometimes not just about valuation but also negotiation with the government.
One of the structures that often requires negotiations or causes landlords to hesitate before building is a footbridge connection.
Footbridges that link buildings are open to the public. Since the 1990s, one of the bases for assessing the land premium needed for such features is the enhanced value to the parent lot.
However, it is difficult for the enhancement in value to be quantified, hence the land premium assessed based on it can be astronomically high.
This has deterred many landlords from building footbridge connections.
For instance, the construction of a footbridge may generate an additional 10 per cent in pedestrian traffic passing through a shopping mall. But it is difficult to quantify if the shops can enjoy an increase of as much as 10 per cent in revenue.