Earlier this month Manchester’s £659m Airport City neatly cemented its reputation as a key UK transport hub. The announcement that a consortium made up of developer Argent and contractor Carillion is tipped to develop the scheme highlighted the continuing issue of the great South East airports row.
From a third runway at Heathrow to an island in the Thames Estuary, the debate continues to rumble on with the only hint of consensus on the issue being that by doing nothing at all, London is likely to suffer. A study by Oxford Economics reveals that shying away from the Heathrow airport expansion could cost the UK £8.5bn a year by 2021 and put more than 100,000 jobs at risk as a result of constraints on capacity.
Meanwhile, in cities around the world including Istanbul, Beijing and Doha, airport-related employment and investment are taking off. “Airports act as drivers for growth,” says Graeme Power-Hosking, airport director at engineering firm WSP. “They require good surface access, which is a boon to anybody because even if you have no direct business with an airport, being near one generally means you’re going to have a good rail network or a good road network as well as freight cargo.”
But just how much positive impact are these large-scale projects really making around the world? Here, Estates Gazette spotlights the global airport developments everybody’s talking about – including Manchester Airport City – and the opportunities they present.
Beijing Daxing International Airport
COST: $11.2bn (£7.3bn)
CAPACITY: 130m passengers a year
SIZE: 55 sq km (22.2 sq mi)
OWNER: Capital Airports Holding
DESIGNER: Netherlands Airport Consultants (NACO)
DEVELOPER: To be managed by Capital Airports Holding.
OPEN: 2018
TRANSPORT: A 37km (23 mile) high-speed rail line will connect the airport to the city, as will an existing metro line.
WHY: The existing Beijing Capital International Airport, with a capacity of 81.8m passengers a year, is bursting.
Did you know? The airport has been compared to the size of Bermuda.Investors should know: This airport, 40km south of the capital, is going?to help Beijing morph into a mega-city, with transport links connecting Tianjin and parts ?of Hebei, breaking down a historical divide that favours the north. And under a $62.9bn, three-year action plan to build 232 major projects,?the vast land resources of the south can be unlocked.
Some $13.39 will be invested in an air transport economic zone alone, on top of the $19bn that has already been spent developing eight industrial parks.
Paul Lin from Colliers International in Beijing, expects the government to deliver a “very ambitious masterplan” for Daxing airport.
“At Beijing Capital International Airport, the government set up a 6 sq km free-trade zone within a ?100 sq km ‘city’ integrating ?air transport, logistics, retail, industrial, leisure and industrial elements. It created more than 3,000 jobs,” he says. “Daxing will surpass all of that.”
Manchester Airport City
COST: £659m
CAPACITY: Airport built for 50m passengers a year.
SIZE: 4m sq ft
OWNER: Manchester Airports Group (MAG) Consortium.
DESIGNER: 5Plus Architects
DEVELOPER: Argent, the Greater Manchester Property Venture Fund and Carillion.
OPEN: 2016
INFRASTRUCTURE: Multi-modal transport connectivity exists, including a Metrolink extension.
WHY: To make Manchester Airport the North West’s key transport hub.
Did you know? The project is being touted as the most significant development since the regeneration of east London in 2005.
Investors should know: This is an ambitious project from MAG centred on one of the UK’s designated enterprise zones, including ?a logistics hub and medical park, and promising to create more than 10,000 full-time jobs over the next decade.
The scheme’s healthy prospects are owing to the fact that there’s an existing major mainline rail station and public transport interchange, bringing a workforce of 5.2m within a one-hour commute.
In addition, the site has several access points to the UK motorway network, placing a consumer market of 25m, and 60% of all UK businesses, within a two-hour drive.
Guarulhos, Viracopos and Brasilia airports, Brazil
COST: These three airports have been privatised as part ?of an upgrade of 12 major airports in Brazil worth $3.4bn; 270 regional airports will also be improved.
CAPACITY: To increase nationally by 81%.
SIZE: Guarulhos will get ?a third passenger terminal ?of 230,000 sq m.
OWNER: 51% private investors, 49% Infraero.
DESIGNER: The state-owned airport operator ?MAG consortium.
DEVELOPER: EC Harris and Arcadis Logos.
OPEN: 2014
INFRASTRUCTURE:?A 55km rapid bus line between Sao Paulo and ?Rio and other projects.
WHY: The 2014 World Cup and 2016 Olympic Games.
Did you know? The Brazilian government?is aiming to put 96% of the population within 100km of an airport with regular flights.
Investors should know: Foreign direct investment in Brazil poured in to the tune of $65.3bn in 2012 and there will be an estimated $1trn in public works spending ahead of the World Cup. Demand for commercial real estate is strong, in particular the retail and industrial sectors, says Fernando Fario of ?CBRE Brazil.
“Our strengthening economy means 40m Brazilians have been lifted from poverty into the middle class over the past decade, so consumerism is growing. As a result, we’re seeing exciting opportunities,” he says.
The two major events will also increase demand for hotels by 15%.
US developers Related Group and Related Cos are riding the construction wave. In 2012 the conglomerate announced a $1bn investment in residential, commercial, tourism and urban development projects over the next three years.
“Of all the possibilities we looked at, the country with ?the best growth prospects?for the next 20 to 30 years is Brazil,” Jorge Pérez, a founder of the conglomerate told Reuters last year. “We see?in Brazil many of the characteristics that the ?US had some years ago.”
UK residential development group EcoHouse is also on board, helping to plug a national housing deficit of 6m to 8m units by delivering 40,000 homes by 2015. They are courting investors, guaranteeing a 20% ROI within 12 months.
Hamad International Airport and Airport City Doha, Qatar
COST:$15.5bn
CAPACITY: 50m passengers a year; Airport City will have a population of 200,000.
SIZE: 29 sq km for HIA;?10 sq km for Airport City.
OWNER: State of Qatar.
DESIGNER: HOK for HIA; OMA and WSP for Airport City.
DEVELOPER: NDIA.
OPEN: Airport earmarked for April; Airport City by 2022.
INFRASTRUCTURE: Rail, metro, bus and an extensive road network will link Airport City to the centre of Doha.
WHY: 2022 FIFA World Cup.
Did you know? The airport will be around two-thirds the size of the city itself.
Investors should know: After winning hosting rights to the 2022 World Cup, the Qatar state added another $40bn to a $100bn pot to modernise the country by 2030. With the IMF expecting economic growth of 20% in the emirate this year, it is a good time for developers to strike. Airport City, a multi-billion dollar project, has been described as the first “serious effort” in the world to interface an airport with the city it serves. With the airport, it will create a workforce of around 250,000 people expected to live in a waterside residential element of the scheme. The city will also incorporate a business district, including a major new transport hub linking with greater Doha; an aviation campus with offices and training facilities for aviation authorities; and cargo and warehouse facilities.
“This is a new city, with the large-scale development that goes with it and the live/work population as well,” said Chris Mead of WSP, which is implementing the masterplan.
“The scale of this development and the transport opportunities it presents means service providers will be able to operate not just city or district-wide, but on a global level.”
Istanbul New Airport
COST: $8.7bn
CAPACITY: 150m a year.
SIZE: 77m sq m
OWNER: State owned.
DESIGNER: Out to tender.
DEVELOPER: A tender is scheduled for May.
OPEN: 2017
INFRASTRUCTURE: An existing metro line is expected to be extended to the airport, which will also link to a third bridge across the north of the Bosphorus, slated to begin construction in May.
WHY: To rival the Middle East bases of Emirates and Etihad Airways. And the city is a contender for the 2020 Olympic Games.
Did you know? This stands to be the largest airport in the world.
Investors should know: As well as the airport, the Turkish government is building “Istanbul Metropolitan”, a 1.5m-person satellite city with an airport workforce ?of 120,000 people. Orcun Makal, of Ernst & Young Turkey, says :”A new city is about to be born in the north-west of Istanbul.”
Mattala Rajapaksa International Airport, Sri Lanka
COST: $210m
CAPACITY: 5m passengers a year.
SIZE:2,000 ha (4,940 acres)
OWNER: Sri Lankan government.
DESIGNER: Local engineers.
DEVELOPER: China Harbour Engineering Company. The airport and Hambantota Port were funded by the Chinese Export-Import Bank.
OPEN: March 2013
Infrastructure:?A $2.5bn plan to extend Southern Expressway from Colombo to the south.
WHY: To accelerate a tourist boom that started at the end of the island’s civil war.
Did you know? Hambantota, one of Sri Lanka’s poorest areas, is being tipped as the second capital of Sri Lanka.
Investors should know: The Sri Lankan government plans to raise $3bn in foreign direct investment from tourism by 2016 and wants to plug a deficit of 1m houses. By 2015 it is estimated that total expenditure on urban development and housing will be more than 230bn – 68% from the private sector. China has spent $3bn on the airport, nearby deep-sea port and Hambantota cricket stadium, as it jostles with India for influence in the region. The projects have created a boom ?in construction in Sri Lanka’s south with returns of 25-30%.
rebecca.kent@estatesgazette.com
