[+] New Frontier Beckons as Rooftop Development Begins to Rise

It is a dimensional shift in the property realm that is looming—not on the horizon but above our urban skylines. And aside from some low-level strategic positioning by a few forward-thinking property players, nobody is shouting about it from the rooftops just yet. In a little under 12 months, however, that will likely change. Preparations are under way to offer the first commercial air taxi services using new zero-emissions flying technology at the 2024 Paris Olympics. If all goes to plan, it will be the real world debut of the revolutionary aircraft known as eVTOLs—electric vertical take-off and landing aircraft. And like the first manned hot air balloon flight in the French capital 241 years earlier, the giant step for advanced air mobility will further elevate the world’s gaze well beyond the ground plane. For the property industry, the future opportunities are sky-high and will potentially come out of thin air—that is, building rooftops and the air space above them. So-called vertiports for take-offs and landings will be key to commercially enabling the eVTOLs and there is even talk of the possible emergence of a new asset class of “sky plots”. ▲ Advocates are confident eVTOL air taxis will be operating for the Paris Olympics next year. Melbourne-based Skyportz founder Clem Newton-Brown has seen the future. In June, he attended the 54th International Paris Air Show and witnessed a flying demonstration of Germany’s Volocopter, which plans to offer a fleet of VoloCity flying taxis during next year’s Olympics and is hoping French president Emmanuel Macron will be the first passenger. Volocopter’s two-seater model is so far the only certified aircraft in its fleet but it is working on having a five-seater approved. “We are counting down the days to making electric air taxis a reality,” Volocopter chief executive Dirk Hoke declared at the Paris Air Show. “We are at the edge of the next revolution.” Newton-Brown agrees. “We’re past the tipping point now of ‘is this industry real’ and ‘is there such a thing as an electric flying taxi’,” Newton-Brown says. “I've got no doubt that these aircraft will be flying commercially within the next year or two. Certainly, the Volocopter will be flying at the Paris Olympics next year.” Five vertiports—each featuring passenger terminals, with one to three takeoff and landing pads—will be built for the Games with future plans to grow the network to cover the whole Paris region over the next decade. Newton-Brown’s Skyportz is an air taxi infrastructure pioneer. It has secured “first options” on hundreds of strategic sites—largely in major centres across Australia's eastern seaboard—that will be potentially built out into a network of vertiports. ▲ Clem Newton-Brown: We’re past the tipping point now of ‘is this industry real’ and ‘is there such a thing as an electric flying taxi’. At the Paris Air Show, the company unveiled its latest design—an affordable ($100,000-plus) modular “vertiport-in-a-box” aluminium structure suitable for smaller sites—that can be incorporated into new developments or retrofitted into existing buildings. “The key to this industry is breaking the nexus between aviation and airports,” Newton-Brown says. “And this is where the property industry holds the key … if we can get these aircraft to land in new places that's when you've got the revolution.” From a property and infrastructure perspective, he compares the rise of urban air mobility to that of the mobile phone. “I see this as a bit like when it became clear we needed mobile phone towers. There was lots of activity with people getting options on buildings to put towers on them. “So, probably next year when the aircraft start flying I think the property industry will realise the benefits of being a first mover and we’ll see this happen.” But even with eVTOLs on the cusp of taking flight commercially, he concedes: “Obviously, there’s still a long way to go”. Initially, he says, the industry will utilise the existing infrastructure of airports and helipads. Then, the next phase in its evolution will be “the lower hanging fruit and safer options” at ground level in industrial and commercial areas. ▲ Air taxis such as Germany’s Volocopter are coming to a rooftop near you sooner than later, says those in the sector. “Once the industry is proven, then inner-city rooftops will come into play … people will certainly be interested in getting options on suitable rooftops but I don't think they'll be activated until the industry is a bit more mature. “Certainly, however, the opportunity is there for the property sector to have a new class of asset … you know, you wouldn't dream of putting in a helipad at a Bunnings or shopping centre but you might do it in the context of electric aviation. “In terms of what the economics look like, it is hard to predict. “But I could see a situation where shopping centres pay an eVTOL operator to establish vertiports at their sites to bring people in and out of their centres. And that then translates into higher rents for their investment. “Similarly, I could also see industrial property charging higher rents if they can offer vertiport services for tenants.” According to Avlaw Aviation Consulting managing director Amin Hamzavian, property developers were already looking to future-proof their new projects to cater for eVTOLs. “There’s definitely people asking questions. We’ve had a few clients going through the process of lodging a DA and wanting to future-proof their asset, knowing that the building is going to be there for 30 or 40 years and at some point there’s going to be eVTOLs operating to and from rooftops. “They want to allow for it on their site … but the reality is that there’s a massive trade-off at the moment because the certification standards and the performance data for the actual aircraft is just not available. “And that obviously trickles down into the regulatory framework in terms of does a certain piece of infrastructure meet or comply with certain requirements? ▲ A render of the “vertiport-in-a-box” Skyportz revealed at the Paris Air Show in June. “The technological side of things is definitely there but it has outpaced the regulations. “So it becomes very tricky to navigate unless someone's genuinely sacrificing, if you like, some short-term gains for possible long-term sort of gain.” In the eyes of rooftop property specialist Warren Livesey, the only way is up for Australia’s cities and it is not just the impending advent of flying taxis shifting the market’s focus in that direction. He estimates the air space above the nation’s strata-titled residential buildings is an untapped $100-billion-plus market. Not only that, he says it is an obvious solution to the nation’s housing crisis. “We don't even have to exceed our existing controls,” Livesey says. “Just by building up to the levels the councils allow us to, we can actually build 100,000 new homes in our cities. “By going up only one level on every single one of those buildings, we would be able to solve the housing crisis 10 times over. And it’s an easier option.” It is lightweight construction, cheaper per square metre and usually modular—built off-site and put up in a matter of weeks instead of months. “Australians just aren’t used to air space developments. “It’s a mindset thing,” Livesey says. “Overseas the largest air space developer is local councils. They see this as a way of doing more social and affordable housing.” ▲ Rooftop development like this in the UK is the fastest-growing trend in London, Singapore and more, says rooftop property specialist Warren Livesey. In London, he says, the government loosened planning regulations for rooftop extensions up to two extra levels in 2020, creating the potential for an additional 180,000 homes to be built through the city. “It's presently the fastest growing property industry trend in London, the US, Canada and Singapore. And it’s becoming more prevalent in Australia.” Even one of Australia’s major supermarket chains is “looking at getting into the air space game”, Livesey says. “With the requirements for more housing, particularly in and around existing infrastructure, and creating wealth to renew our buildings, there's going to be a larger demand going forward.” Air space rights or rooftop property transactions are negotiated for a number of reasons, including building extensions and securing viewlines but increasingly to fund expensive refurbishments and much-needed repairs for ageing buildings. “By titling off the rooftop and selling it, you’re creating an asset out of a liability,” Livesey says. “And we’re actually getting it to a point where you can buy a sky plot, basically an area of air space on top of buildings a lot easier.” Through his Sydney-based business Buy Airspace, he says he has struck more than 50 deals that have “turned over close on a $42 million worth of air space this year so far”. “The average rooftop in Bondi is worth a million dollars … most air space transactions are around $800,000 to $1.2 million. It’s a gold mine. It’s creating value and more homes out of thin air.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Hotel & Hospitality
Phil Bartsch
Mon 14 Aug 23

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