Beyond Borders: The Evolution of Air Rights Trading Across the Globe

The idea of air rights dates back to 1797, when it was first considered as a form of "space ownership." This ownership extended to the space above or below a piece of land, without any set boundaries. In previous articles, we discussed how air rights can offer a way to earn passive income, as they represent a unique asset that can be leased or sold. If you own a plot of land, you likely also have rights to the airspace above it, following the Latin principle, "cuius est solum, eius est usque ad coelum et ad inferos” meaning "whoever owns the land owns it up to the sky and down to the depths." Practically, this means that the right to use the airspace above land is typically limited to the height necessary for normal use and enjoyment.

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However, regulations on air rights vary widely by country. In some places, there are no clear rules governing airspace rights, though many governments are expected to address this as urban development grows. As a trailblazer in the air rights marketplace, SkyTrade recognizes the global potential of air rights and aims to help people secure these rights legally and make the most of their value. Let’s look at how air rights have evolved across different parts of the world.

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Air Rights Evolution Across Major Countries

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United States

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In the U.S., landowners once had unrestricted rights to the airspace above their property. However, with the growth of commercial aviation in the 20th century, new regulations were established. Today, air rights are frequently bought and sold, with zoning rules typically allowing construction up to about 100 feet. In New York City, air rights are priced between $100 and $300 per square foot, but in densely populated areas like Manhattan, they often range from $200 to $400 per square foot due to limited land availability.

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A well known example of air rights transactions in Manhattan is St. Bartholomew's Church, a historic site in Midtown. To fund its preservation, the church sold around 150,000 square feet of air rights, valued at approximately $78 million. These rights were transferred to a developer, enabling the construction of an office tower on Park Avenue.

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United Kingdom

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In the UK, while selling air rights is still relatively rare, it is a legally viable option that is slowly gaining traction as developers seek creative ways to address housing shortages. Airspace above buildings is typically divided into two levels: the lower and upper sections. The lower section, directly above and around a property, is controlled by the owner, and any encroachment here is generally considered trespassing. The upper section, however, presents a unique development opportunity, especially in cities where space is limited.

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A notable example is the £9 million funding partnership between Homes England and airspace developer Apex in February 2019. This collaboration aims to create new rooftop housing across London neighborhoods, including Tooting, Wanstead, Walthamstow, Putney, and Wellington. By utilizing previously unused rooftop space, the project supports the UK’s goal of delivering 300,000 homes annually by the mid 2020s. This effort highlights how air rights can help meet urban housing needs without using additional land, marking an important step toward addressing the UK’s housing challenge.

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Australia

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Australia has taken an innovative approach to air rights trading as a way to balance urban growth with heritage preservation, particularly in Sydney. Launched by the City of Sydney in 2015, this program allows developers to purchase "air space" above protected heritage sites, providing funds for conservation while allowing for expansion in other locations. For instance, the New South Wales government raised $50 million in 2017 by selling air rights above the entrance to Wynyard Walk near the Wynyard train station. In another case, developers like Lendlease paid $20 million for more than 12,000 square meters of air rights above Hyde Park Barracks, enabling them to build upward in other areas without exceeding traditional height limits.

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While not as extensive as New York’s skyscraper air rights market, this strategy is gaining traction in other regions. In Queensland, homeowners have even bought neighboring air rights to safeguard their views of the Brisbane skyline. With urban land in high demand, Sydney’s forward thinking model of air rights trading may inspire similar initiatives in other Australian cities.

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Japan

In Japan, air rights are increasingly being used as a tool to optimize land use, allowing property owners to transfer unused floor area ratios to other development projects. A prominent example is Tokyo's plan to relocate the metropolitan highway currently running above the Nihonbashi River by moving it underground. To fund this project, the city aims to raise conIn Japan, air rights are increasingly being utilized as a strategy to optimize land use, allowing property owners to transfer unused floor area ratios to other development projects. A notable example is Tokyo's plan to move the metropolitan highway currently located above the Nihonbashi River underground. To finance this project, the city plans to cover construction costs through the sale of air rights. Similarly, the restoration of Tokyo Station required a significant investment, estimated at around 15 billion yen. To fund this, Tokyo Station sold its air rights to nearby properties, including six buildings such as the Shin Marunouchi Building in Grand Tokyo. These examples illustrate the growing interest in air rights as a means to finance urban development and preservation initiatives.

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Key Trends

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1. Increase Value

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Air rights can provide a significant returns especially in urban areas where land is scarce, expensive and the demand is high. So, this can be the key trends of air rights trading and it can maximize the vertical space by partnering with developer to address housing crisis, greenspace,etc.

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2. Diversification

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Air rights are a real world asset with a history of value validated over centuries, offering investors a unique way to diversify their exposure to real estate beyond traditional property ownership. By including air rights in their portfolios, investors can spread risk across different asset classes and markets.

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3. Blockchain Technology

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The advancement of technology blockchain, empowers individuals to hold ownership without traditional intermediaries. This innovation not only streamlines distribution, transfer, and security processes, making them efficient and effective, but also allows owners to track assets in real time, giving them full control without needing a middleman.

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SkyTrade Leads the Revolution in Air Rights Trading

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SkyTrade is transforming the real estate industry by launching the world’s first blockchain enabled marketplace for air rights trading. This platform allows property owners to monetize the airspace above their land, bringing a new level of transparency and efficiency to what has traditionally been a complex, intermediary driven process. By leveraging blockchain and smart contracts, SkyTrade simplifies air rights transactions, which is particularly timely as cities worldwide face urban density challenges and an increased demand for aerial space especially with the growth of drone delivery services and unmanned aerial vehicles.

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In a major early achievement, SkyTrade has already tokenized 7,000 airspaces valued at $35 million, showcasing strong market demand and the vast potential of aerial property rights. Looking ahead, the platform aims to collaborate with governments to establish standardized frameworks, positioning itself as a leader in this emerging trillion dollar market. As urban development continues to expand vertically, and aerial commerce becomes essential, SkyTrade’s innovation could play a transformative role in shaping modern cities.

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