chris le tourneur - session 2: non-aeronautical revenue development

MXDdevelopment.com

Session B1 Commercial Development & Airport Real Estate

Chris LeTourneur - President & CEO, MXD

Connecting a world of opportunities TM

2014 AIRPORT CITIES WORLD CONFERENCE & EXHIBITION

Kuala Lumpur

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Thank You to Our Fantastic Hosts

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Thank You to Our Fantastic Hosts

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Leveraging the Real Estate Assets

Airport Cities

are the

for Regional

Non-Aero Revenue

Commercial &

Economic

Development

Competitive Accelerators

Gateways

Catalysts

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Leveraging Connectivity

LEVERAGING

AIRPORT GATEWAY for ECONOMIC

DIVERSIFICATION

REGIONAL ECONOMIC

NICHE

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Airport City Commercial

Development

Generates Non-Aero

Revenue & Grows Demand

for Air Travel

Drives Regional Economic Activity &

Airport Competitiveness

Drives Airline Interest for

Route Development

Driving Air Service - Route Demand

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MXD’s Role

Creating Airport Cities

AIRPORTS COMMERCIAL

DEVELOPMENT

CONNECTING

ECONOMIC & REVENUE

DEVELOPMENT

Airport City Master Planning

Case Study Profiling/Benchmarking

Market Analysis & Positioning

Financial Feasibility & Structuring

Economic Cluster Analysis

Commercial Development

Landside Development Strategy

Implementation & Governance

Marketing, Branding & Identity

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Edmonton International Airport

Muscat International Airport

Memphis Aerotropolis

Belo Horizonte, Brazil Vancouver International Airport

Halifax Stanfield Intl Airport Winnipeg International Airport

Denver International

Aerotropoli & Connected Cities by MXD

Hong Kong SkyCity

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Airports’ Role in Commercial Development

© Property of MXD Development Strategists

Landside Commercial Planning & Ground Leasing

Terminal Development & Concessions Revenue

Airport Master Planning Identifying Landside Commercial Areas

Airport as Developer or Joint Venture Partner

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Airport Management & Development Models

UNITED STATES

Governed at City/County Level

Subject to local politics (-)

FAA impacts/implications (+/-)

Bonding/financing capabilities (+)

Tax Payer sensitivity (-)

CANADA / AUSTRALIA

Quasi Private-Public

Leased Federally Owned Property

Autonomy from local politics (+)

Flexibility for Innovative Devlpt (+)

Must Generate Non-Aero Revenues

MIDDLE EAST

Sovereign ownership/operation

Transcend reality - innovative

Profitability is not only driver

Autonomous decision making (+)

Speed to market is fast (+)

AFRICA / ASIA / EUROPE

Privatized / Airport Companies

Profitability is bottom line

Vested in Commercial Development

High Speed Rail Links (+)

Embrace Mixed-Use TOD (+)

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Market & Revenue

Assessment

Airport City Case Studies

Site Analysis

Economic Cluster

Analysis

Optimal Development

Program

Engineering Concept Analysis

Concept Layout

Planning

Financial Analysis

Commercial Development

Plan

Branding & Identity

Target Tenants Marketing Materials

Stage One - Development Strategy

Stage Two - Development Plan

Stage Three - Marketing Strategy

Political/ Initiatives

Stakeholders

Implementation Plan

Airports Thinking Like Developers

© Property of MXD Development Strategists

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Airport Cities & Economic Clusters

Gateway to Accelerate Regional Economic Development

© Property of MXD Development Strategists

Create More and

Better Jobs

Attract Inward

Investment

Diversify the Economy

Enhance Tourism

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Leveraging Economic Clusters

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Up & Down Stream Economic Clusters

Economic Clusters

Aviation

Logistics/ Distribution

Education

Bio-Life Sciences

Perishables

IT/CT

Tech

R & D

Engine

Testing

Avionics

Advanced

Manufacturing

Composite

Materials

Parts

Assembly

Chemicals

Resins

Cloud

Computing

R & D

Service/

Assembly

Foods &

Flowers Nutra &

Pharma

Temp

Control

Chain

Health

R&D

Devices

Incubators

Supply

Chain

Cold/Dry

Storage

Skills

Jobs Niches

Technology

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DENVER INTERNATIONAL AIRPORT CITY, CO, USA Belo Horizonte Aerotropolis, Brazil

Logistics & Distribution Business Park

Agribusiness & Food Processing Lagoa Santa

Town Center

University Campus

R & D Discovery Park

Retail Outlet Center

Fashion City & Exhibition Center

Heavy Equipment Auction

SIX Semiconductor Town Center

Aerotech Park

Health Sciences Center

Temperature-Controlled Cold Chain Facilities

Administrative Service Center

Luzia Cultural & Archaeological Center

MG424/LMG800: Aerotropolis City Center: Lagoa Santa:

Six Semiconductor:

Using “Pilot Projects” as Catalysts, Enablers & Accelerators

Triggering “Upstream & Downstream” Economic Activities

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DENVER INTERNATIONAL AIRPORT CITY, CO, USA Belo Horizonte Aerotropolis, Brazil

Economic Impacts for 20-Year Build-Out:

NEW JOBS

660,000

PUBLIC

INFRASTRUSTURE

INVESTMENTS

$10 Billion PRIVATE

DEVELOPMENT

INVESTMENTS

$100+ Billion

NEW POPULATION FROM

NEW DIRECT JOBS

1 Million

ANNUAL BUSINESS

OUTPUT

$82 Billion

NEW DEVELOPMENT

FLOORSPACE

190 Million sf

ANNUAL TAX

REVENUES

$10 Billion

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Memphis Aerotropolis

COMMUNICATING WITH

COMMUNITIES AGENCIES BUSINESSES

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Telecom & GeoSpatial

Tech

Life Sciences &

CRO’s

R & D Aerotropolis Institute

Targeted Economic Clusters & Tenants

Targeted Economic Clusters & Tenants

Airport West - 1 (AW-1)

• Memphis Aerotropolis Institute

• Single-Tenant Flex

• Research Commercialization

• Corporate Hotels & Conference

• Discovery Business Park Incubator

• Contractual Research Org’s (CRO’s)

Land Use GFA (SF) Avg. FAR Land Req's

(Acres)

Industrial 337,500 0.23 33.8

Office 382,500 0.27 33.0

Retail 80,000 0.25 7.4

Lodging 122,500 0.52 5.4

Residential - - -

Institutional 229,500 0.90 5.9

Totals 1,152,000 0.31 85.5

Land Use Program (Net Additional)

Memphis Aerotropolis

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Memphis Aerotropolis

Airport West - 1 (AW-1)

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Memphis Aerotropolis

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Memphis Aerotropolis

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Ekurhuleni Aerotropolis

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Ekurhuleni Aerotropolis

Economic Connectivity

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Ekurhuleni Aerotropolis

Stakeholder Outreach

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Ekurhuleni Aerotropolis

Economic Development Districts

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Level 2 AIRPORT INSTALLS INFRASTRUCTURE &

LEASES SERVICED LAND

Level 4 AIRPORT INSTALLS INFRASTRUCTURE &

PARTICIPATES IN CASH AND/OR BUILDING CONSTRUCTION IN JOINT VENTURE

Level 3 AIRPORT INSTALLS INFRASTRUCTURE &

PARTICIPATES IN JOINT VENTURE BASED ON RESIDUAL LAND VALUE

Level 1 AIRPORT GROUND LEASES

RAW LAND ONLY

Level 5 AIRPORT INSTALLS INFRASTRUCTURE, CONSTRUCTS BUILDINGS, MARKETS &

PROPERTY MANAGES DEVELOPMENT PROJECT

Different Land Use

Development Projects require

Different Approaches

Airport must consider its Core Abilities versus

Partners who are Experts in

Marketing, Development & Management of specific project

types

Levels of Airport Development Risk to Reward

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The level of Airport participation in Airport City real estate development

relates to in-house abilities and upside revenue potential.

Hierarchy of Risk in Airport Participation

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Marketing, Implementation & Governance

Development

Services Division

Non-Aeronautical

Revenue Management

Property Management

Ground Leasing, Joint-

Venture Partnerships,

Construction &

Development Agreements

Groundside

Infrastructure/Services

Development

DEVELOPMENT & REVENUE PLANNING & MARKETING

Land Use Planning &

Design

Criteria/Guidelines

Real Estate Marketing

Development Review

(Expedited Process at

the Airport)

Municipal

Authority

Inter-Jurisdictional

Improvement District

& Participation

Liaise

Inter-Jurisdictional

Liaison

Liaise Liaise

Liaise

Airports

becoming

Active in

Development

Process

Development Partnerships

Infrastructure Agreements

Marketing & Property Management

Design Guidelines

Inter-Jurisdiction Agreements

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Airport City Development Approaches

Who What How

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Airport City Development Approaches

Who What Where

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Airport City Development Approaches

What How Where

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Thank You!

MXDdevelopment.com Chris LeTourneur, President & CEO

chris@mxddevelopment.com +1-604-644-4139

MXDdevelopment.com

Our Outstanding Speakers

Kahir Mirza - Malaysia Airports Senior General Manager

Yuta Inoue – MFMA Development Sdn Bhd General Manager

Mari Peltomaki - Airport Area Marketing Ltd. Project Manager

Hubert Fontanel - Aeroports de Paris Deputy Director

Session B1: Commercial Development & Airport Real Estate