The Financial Times reports that Crossrail, the new east-west underground rail line currently being constructed in London, is sparking office development near stations on the route, with expectations of rents rising 10% over the next decade above the baseline projection. While a business levy is contributing to the construction cost, this captures only a fraction of the rise in values from Crossrail. This office construction is part of a trend for companies to move back into central London, reversing a 20-year exodus aimed at cutting costs. Businesses find that they can’t attract quality staff outside the capital.
The general point is that new transport infrastructure, well located, enhances access and prompts the construction of commercial and residential property, the source of employment and homes. This is how the benefits of transport investment materialise. Property owners who benefit from enhanced values should be expected to contribute to the cost of construction.