An anticipated addition of nearly seventy-eight million square feet of real estate space is projected by 2015, attributed to the forty-seven airport modernization and upgrade initiatives taking place. According to the Airport Realty Report released by global property consultancy Cushman & Wakefield, the projects span over forty thousand acres, covering forty existing airports and seven newly proposed ones.
The analysis suggests that if the airports undergo modernization by the specified deadlines, non-aeronautical revenues could increase significantly, rising from 35% to as much as 54% by 2015. It is predicted that revenue collected from retail, office, and hospitality sectors will account for nearly 45% of all airports' non-aeronautical income by the same year. Other income streams will also contribute, including trading concessions, public admission fees, advertising revenues, and parking fees, varying the income sources.
Mr. Anurag Mathur, the joint managing director at Cushman & Wakefield, stated, "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."
The study indicates that retail space alone is expected to make up 18% of the overall real estate space designated for airport projects. A major portion of this anticipated supply will be located in tier-III towns and cities, known for their appeal as tourist destinations. Nonetheless, the highest concentration of this retail space is expected in Hyderabad, accounting for an impressive 1.8 million square feet of the total projected retail availability.
Furthermore, the estimates suggest that office space will constitute over 50% of the total real estate space projected for the airport upgrades. With approximately forty-one million square feet of office area planned, tier-I locations are expected to contribute 14 million square feet, while five tier-II cities are anticipated to deliver 13.5 million square feet by 2015. Likewise, tier-III locales, which encompass more than thirty-five cities, are projected to account for around 32% of the total office space supply, yielding fourteen million square feet.