Nearly seventy eight million square feet real estate space is expected to be added by 2015 due to forty seven airport modernization and upgrade projects.
The projects cover forty thousand acres across forty existing and seven new airports, according to the Airport Realty Report by global property consultancy Cushman & Wakefield.
The report says if the airports are modernized according to schedule, the non-aeronautical revenues may rise from the current 35- 54% by 2015. It is estimated that rent from retail, office and hospitality will constitute nearly 45 % of the airports’ non-aeronautical revenue by 2015. The rest will come from other non-aeronautical sources like trading concessions, public admission fees and miscellaneous income from advertising, car parking, etc.
Mr. Anurag Mathur, joint managing director, Cushman & Wakefield, said,”Globally, airports derive a large portion of their income from non-aeronautical revenue sources; Heathrow, San Francisco, Vancouver and Brisbane earn as much as 50% from retail and other non-aeronautical resources. With greenfield projects in Hyderabad and Bangalore taking their maiden steps, India is soon to replicate this potential revenue-earning model.”
According to estimates, retail space accounts for 18% of the total real estate space projections for airport projects. Most of this supply is concentrated in tier-III towns and cities as it comprises tourist destinations. The highest supply is, however, expected to be in Hyderabad, which accounts for 1.8 million square feet of the total projected retail space.
The study estimates office space to be more than 50% of the total real estate space projected for airport projects. With nearly forty one million square feet office space planned, the three tier-I locations are expected to add 14 million square feet office space, whereas the five tier-II cities expect 13.5 million square feet by 2015. Tier-III locations, which include over thirty five cities, would account for around 32% of the total office space supply amounting to fourteen million square feet.