The Evolution of Value is the Evolution of Catchment

The extent of any property occupiers’ use of infrastructure is determined by the catchment of that occupier.

The catchment of an internet business such as Amazon, is in theory infinite, although each building’s actual catchment and therefore infrastructure use will be defined by the business operation. The catchment can be usefully compared with that of an out of town shopping centre, or an Argos “click and collect” store. All three being greater than that of a ‘bricks only’ high street shop. Catchment is relevant to any customer, resident, or business and will determine the value to any occupier of their building occupation.

The evolution of land use and of value has always been the evolution of catchment. The internet is bringing this into sharp focus.

Location location, location are not new as being the three most important elements of a building, or more accurately of the land on which it sits, but the internet highlights the evolution in determining the value of a location that has been taking place as occupiers communication options have expanded

Out of town development utilises lower land costs and any retail use will capture purchasing power from a dispersed catchment through the use of extensive public infrastructure. Residents uniquely, will balance their desire to belong to any required catchment with a value placed on not belonging to other building or town’s catchment. London as always being the key catchment to consider.

Town Centre land values already reflect their catchment through the higher land and property values brought about by the extensive public investment in them. Retail warehouses and ‘Amazon’ building and also land values do not reflect their intensive use of highway infrastructure.

The currently topical rating system, if to be fair in respect of reflecting public infrastructure use needs to catch up to reflect the catchment served by any building at its location. This would then redress the value imbalances currently enjoyed by both out of town retail and the talismanic ‘Amazon’ buildings. Supplemental business rates for Crossrail have already levied building tax in relation to catchment on selective businesses and Crossrail 2’s funding may also include a rates levy. 

The big step for Government is to consider assets generally and not just in relation to their development.

Global economic realities must shape Government investment decisions by location. Assumptions based on the inertia of historic land use need to be understood for what they are.

Radically different engines of growth, business linkages

and economic outcomes will require location specific

infrastructure investment if sustainable growth is to be

secured in each region. Sensitivity to the economic

outcomes achievable from each infrastructure investment

and its sustainability in economic and social terms must

be an unavoidable priority.

The economic reality is that HS2 will bring value to the North largely through enhancing its connectivity within London’s hinterland and enabling it to benefit from London’s global catchment as eg Milton Keynes and Reading currently do. ‘Get on the train’ can be added to ‘Get on your bike’.

Jonathan Naughton

Tags: , , , , , , , , , , , ,

Comments are closed.