Urban India is seeing a new phenomenon of Aerocities, which are fully functional business districts anchored around the airport. As per the latest report by 360 Realtors prepared in partnership with Axon Developers, the country has 9 Aerocity projects spread over 14,000 acres of land parcels.
Close to 22% or 3050 acres of Aerocity land is operational in India, which includes Aerocities in Delhi, Hyderabad, Mohali, and Durgapur. Around 18% or 2585 acres of Aerocity land is under development and is expected to soon the enter the market supply.
Some of the under-construction projects include 150 acres of project near the newly-inaugurated Valmiki International airport in Ayodhya, 463-acre mixed-use project near Devanahalli airport, and 172-acre Aerocity project near the Jewar Airport, which is slated to open soon. Work is going full swing on the 740-acres Aerocity project near the Navi Mumbai international airport. The project is developed by Adani in partnership with CIDCO.
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Amongst key projects that has been announced, the UP-state government is contemplating to build a 1500-acre cityside development near the Lucknow airport.
In the 2000s, the concept of Aerocities were first seen internationally in the form of self-sustainable urban ecosystems near Singapore, KL, London City, Dallas, and Dubai Airports. These vibrant business districts started evolving as parallel CBDs, defining new contours of city’s growth.
In 2010, India saw its first Aerocity around IGI airport during the Common Wealth Games. Spread across 200 acres, it has today become one of the most sought-after neighbourhoods in NCR, drawing parallel to Cyber Hub, Golf Course Road and Vasant Kunj. The GMR Aerocity is home to premium 15+ hotels. Over 100 leading F&B enterprises are present in Aerocity alongside a slew of other lifestyle stores, high streets, speciality stores, etc. GMR is also developing other upscale Aerocities in Hyderabad (1500 acres) and MOPA (232 acres).
Drawing attention of big business & start-up alike
Aerocities are harbingers of modern Indian lifestyle. “Aerocities were initially designed as commercial transit hubs catering to domestic and international passengers. However, with time they have evolved into fully functional commercial suburbs comprising multiple upscale hotels, posh retail stores, F&Bs, high-class office complexes, etc becoming a go-to spot for both travellers as well as affluent urban dwellers. They also consist of logistic parks, business parks, e-commerce warehousing, etc. operating as commercial catchments,” says Ankit Kansal, MD, 360 Realtors.
Aerocities can range anywhere from 200 to 1500 acres around the airport region (Mostly 1-3 km from the main airport premise.) “Business houses, corporates, and MNCs are keen to set up their head office or regional offices in the Aerocity area. Not only it saves travel cost but also helps businesses get access to top-tier talent. Aerocities offer conducive but relaxed atmosphere for business networking, exchange of ideas, and semi-formal hangouts, becoming very popular amongst established business and start-ups alike,” adds Kansal.
Growing Shift Towards NAR
There is growing shift towards Non-Aeronautical Revenues (NAR) amongst Airport operator. Developing and operating airports require huge investments, and relying completely on passenger fees, airline fees, parking & hanger charges won’t suffice. Hence Airport developers & operators are actively venturing into a wide range of potential area such as F&Bs, lifestyle, hospitality, destination marketing, real estate, etc to build new revenue streams.
The pandemic has also reinforced the importance of diversifying revenue stream into new viable alternatives. Globally, the share of NAR is close to 60%. In India it is still low baring larger airports such as Delhi (60%) and Mumbai (55%). In smaller airports, it is limited to around 15-20%. However, the trend is changing and Aerocities are set to play a pivotal role, as they offer lucrative real estate opportunities.
Bustling Ground for Hospitality Industry
Aerocities are bustling ground for hospitality industry with growing concentration of luxury hotels, upscale hotels, corporate guest houses, long rental projects, serviced apartments, etc. As per the data revealed by 360 Realtors research, total branded rooms in Aerocities are pegged at ~ 5500. By 2030, it is slated to reach ~ 12,000, growing at a CAGR of 16.9%.
In Delhi Aerocity alone there ~ 4,000 rooms with an extensive pipeline of around 3000 additional rooms. In the Bangalore Aerocity, there is an extensive pipeline of around ~ 2500 rooms. In Hyderabad Aerocity, a 290-room Novotel hotel is operational. Boston Living is building a 1500-bed premium co-living space in the region. The Hyderabad Aerocity, once fully completed, will be one of the largest real estate projects in India.
