So Bakes (honestly I eh read through all what you and FS write), I f I rent piece ah land from you for 5 years, and I build ah house, after five years you say you not leasing me the land anymore, the house is yours?
it all depends on what the lease says. If you don't have permission to build then yuh out ah luck. If yuh do have permission, a court might say "nah, dat ent fair", and give yuh something for the property. But the landowner always free to up the rent. In the alternative yuh always free to break it down and take it with yuh... provided yuh ent significantly damage the property in the process, or else you on the hook fuh dat. Which is why is a gamble to build any kinda structure on property that isn't yours. Why would you want to do that anyways?
For businesses, sometimes it might make sense to run the risk. In the US at least you could always write off the capital depreciation of the property so that in the long term giving up the property to the landowner might be a wash. But you could same way buy, build and sell later, if you ask me.
Actually, its a very sound investment for both the leasee and the leasor. Land historically increases in value, so if you own land but lack the finance to build, you can lease the land for a fixed period, say 50 years, and retain ownership. This is common with trust funds, pension funds etc. A hectre (2.5 acres) of land in London in 1983 would have been worth around £750,000. Now it would be worth £5.5 million. So, you keep the land and rent it for, say £12,000 per year, which earns you £360,000 and the land increases by over £4.5 million.
To the leasor, its also a good deal. They may not have the finance to buy the land. Once the land is obtained by lease, they can borrow against the completed value to build. Usually the calculation of value is one third land, one third build, one third profit. So, if the land cost £750k, it would cost approx £750k to build with a final value of £2.25 million. The building value will increase over time, but once the lease length reaches 15 years remaining, it will begin to decrease.
The reason this is a good deal for the leasor, is that they will rent the building, usually as office space. Currently a 1,000 sq ft office in an unfashionable section of Central London will cost you around £2,200 per month. If you have 10 offices in your building, that equals £22,000 per month or £264,000 per year. Even allowing for lower rent in some years, you can still expect to make around 500% profit over 30 years. Then you can renegotiate the lease or just walk away.
Tottenham Hotspur purchased nearly all of the land surrounding their White Hart Lane Stadium in the 1920's & 30's. They then leased the land for shops, offices and flats. Over the last 20 years they have failed to renew leases and now have plans to flatten it all, sell some land to a developer and that money will pay for their new stadium plus blocks of flats which they will rent out.
The point of all this is that if Warner owned the land and leased it to CONCACAF, he could make a killing if he charged a high rent. And he can simply refuse to renew it at the end of the term. Its also a great asset to borrow against, as there is a fixed income.
Sorry if this became boring!!