OK, here's how it works: You start with physical reality:

Two objects cannot occupy the same space at the same time, and space (at least, usable space) is finite. Likewise, two people cannot make use of the same space (land) at the same time, and there's only so much land on any one planet.

Then, you move on to the logical conclusion from that physical reality:

Therefore, space, being scarce (finite), must be allocated.

Now, we move on to a statement of preference, based on that logical conclusion:

The fairest means of allocating space is that the first occupier has a better claim than all subsequent claimants, and this claim can only be transferred voluntarily.

As Stephan Kinsella points out in "Against Intellectual Property":

Now, I'm open to alternatives, if you can present a resource allocation strategy that is demonstrably fair, non-arbitrary, and prevents conflict over scarce resources such as land.