Around 78 million square feet 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, according to an Airport Realty Report by Cushman & Wakefield.
These projects cover a total of around 40,000 acres of airport area, including 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 cent per annum, India has seen an average annual growth rate of 35 per cent 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 per cent to 54 per cent by 2015. It is estimated that rent from retail, office and hospitality space will constitute approximately 45 per cent 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 like advertising and car parking among others.
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 per cent 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 the estimate, space for retail accounts for 18 per cent of the total real estate space projections made for airport projects. Most of this supply is concentrated at 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 sq. ft. of the total retail space projected.
Cushman & Wakefield Research estimates office space to be more than 50 per cent 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 per cent of the total office space supply amounting to 14 million sq ft.
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