Airport Realty Estimated at 78 Million sq. Ft. – Cushman & Wakefield Report
2 Sep, 2008, India
According to Cushman & Wakefield, Airport Realty Report, approximately 78 million sq. ft. of real estate space, across retail, commercial and hospitality, can be expected in the country by 2015 with the modernisation and upgradation of the 47 airport projects. These projects cover a total of approximately 40,000 acres of airport area which includes 40 brownfield and 7 greenfield projects across tier I, II and III locations of India.
At a time when the global growth rate of the airport sector has been about 9% per annum, India has seen an average annual growth rate of 35% over a period of six years. According to Cushman & Wakefield, if the current privatisation trend continues and all airport projects under development, as specified in the 11th Plan, are modernised as per schedule, then non-aeronautical revenues might increase from the current 35% to 54% by 2015. It is estimated that rent from retail, office and hospitality space will constitute approximately 45% of the total non aeronautical revenue by 2015 and the rest of the income would be generated from other non aeronautical sources like trading concessions, public admission fees and miscellaneous income i.e. advertising, car parking etc.
Anurag Mathur, Joint Managing Director of Cushman & Wakefield says, “Globally airports derive a large portion of their income from non-aeronautical revenue sources; Heathrow, San Francisco, Vancouver and Brisbane, bring in as much as 50 % of their revenues from retail and other non-aeronautical resources. With the greenfield projects in Hyderabad and Bangalore taking their maiden steps, India is soon to replicate this potential revenue earning model.”
According to Cushman & Wakefield research’s estimate, space for retail accounts for 18% of the total real estate space projections made for airport projects. Most of this supply is concentrated at tier-III comprises of tourist destinations. The highest supply is however expected to be in Hyderabad which accounts for 1.8 million sq. ft. of the total retail space projected.
Cushman & Wakefield Research estimates office space to be more than 50% of the total real estate space projected of the airport projects. With nearly 41 million sq. ft. planned the three tier-I locations are expected to received 14 million sq.ft. of office space, where as the five tier II cities expect 13.5 million sq.ft. by 2015. Tier III locations which include over 35 cities would account for approximately 32% of the total office space supply amounting to 14 million sq.ft.
According to the research estimates by Cushman & Wakefield, space for the hospitality industry accounts for nearly 30% of the total airport real estate space projection. This hospitality space will be spread across roughly 27,525 rooms which includes 10,050 five-star properties, 12,270 four-star properties and 5,205 three-star and other budget properties across the country. Five-star hotel rooms dominate the commercial development space of airport projects in tier-I cities, with a comparatively lower presence in tier-2 & 3 locations; while four-star properties are more evenly distributed among the three mentioned tier zones.
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