BIAL and the Hyderabad international airport are relying on commercial activities to raise additional resources. Worldwide, airports such as London Heathrow host a range of products for retail, both inside and outside their departure lounges—from grocery chains run by Marks & Spencer Plc. for everyday food and snacks, to an upmarket Giorgio Armani cosmetics counter.
Hotel chains, rushing in to address an estimated 1,50,000 room shortage in India, are also queueing up at airports. BIAL, which is promoted by a consortium comprising Siemens Projects Ventures, Larsen & Toubro Ltd, Unique Development Corp. and the Airports Authority of India, has selected the Oberoi Group and Larsen & Toubro to build and operate a first-class international hotel under the Trident Hilton brand within walking distance of the terminal building. The hotel will cost about Rs250 crore and offer 321 plush rooms, large conference facilities, restaurants and a world-class spa. If the project meets its deadline, the hotel will be in place by November next year.
The GMR Group has a land bank of about 700 acres at the Hyderabad airport, too, and it plans to monetize this in the next few years. A consortium led by GMR has tied up with Singapore’s Accor Hotels and Resorts to operate its first business hotel here. The hotel, which will start operations after March 2008, will come up on a five-acre site about three km from the passenger terminal. According to GMR Hyderabad International Airport Ltd (GHIAL) chief operating officer T. Srinagesh, the hotel is being developed in line with practices followed by all leading airports in the world.
The competition between Hyderabad and Bangalore to become India’s next centre for outsourcing and technology companies is adding fuel to the race to develop airport properties. The GHIAL-led consortium plans more commercial real-estate development, including convention centres, business hotels, business park, industrial estate, free-trade zone, shopping malls and entertainment complexes.
Nuance and Shopper’s Stop have won a seven-year deal to operate retail at Hyderabad International Airport, too. They expect to earn revenue of up to $240 million (Rs984 crore) over the seven years. The contract will commence in March 2008, when the airport is to open.
BIAL also plans to have commercial activity for large offices and other related real-estate spaces. In future, the airport city will have more hotels, along with retail, serviced apartments, office park, software campuses and a lot of free public spaces, a BIAL spokesperson said.
BIAL will be looking for two mono-brand outlet operators each in the domestic and international departure areas, along with retail outlets on the curbside. It will develop a mall, which will offer merchandise and food courts and be an alternative destination for those who prefer a lively experience.
As airports “grow, they are sitting on acres of land” that will allow for the building of modern spaces, said B.S. Nagesh, managing director, Shoppers’ Stop, a listed entity promoted by the K. Raheja Group. “Today, there are no malls, there is no good environment to do the kind of single-brand retail that is permitted by the government,” he said.Shoppers’ Stop’s two contracts, estimated to be worth $150 million, cover retail space of approximately 3,400 square metres.