This article was first published in the International Airport Review on 25 January 2018 and shared more than 300 times https://www.internationalairportreview.com/article/64259/wiedemann-airport-cities-aerotropolises/
Late to the urbanisation game, airports were often an add-on to a city’s development. Today, operators and local authorities are striving to turn airports into economic and commercial hubs in and of themselves, an aerotropolis. But the journey is rife with pitfalls. Dr Mirjam Wiedemann of WiedemannConsultants GmbH tells us more.
A lot of the discussions around the topic of airport cities or aerotropolises in the last decade or so have been about indroducing the phenomenon and celebrating every new ‘arrival’. While the airport city or aerotropolis as a business model is well-accepted globally, very little debate has taken place around failed examples or how to achieve reliable results; means successful, bankable projects that are profitable in the long run.
This article does not aim to be comprehensive about the topic of airport city and aerotropolis master planning but shed some light on a few principles that are paramount for good airport city and aerotropolis planning.
Without doubt, thorough strategic planning is utterly important. The same as airports conducting regular master planning exercises or master plan updates, the airport city or aerotropolis needs long-term strategic vision and planning. Depending on the size and scale, a vast number of stakeholders with very different backgrounds and priorities must be involved. The aim is to develop a long-term master plan that is supported by all relevant stakeholders, in favour of future tenants and attractive to investors. A thorough strategic plan also helps to win confidence from the financial establishments and support from inside the organisation.
Especially when a fully-fledged aerotropolis is envisioned that stretches numerous kilometres into a region, early and consistent stakeholder management is crucial. Examples like Helsinki or Stockholm have shown that bringing all groups involved together at an early stage pays off in the long run. Other projects that failed to acknowledge the importance of stakeholder management keep going in circles year after year.
Another reason why bringing everyone together in an early stage is that an aerotropolis often stretches over numerous municipalities and the discussions about tax rates and revenues can be fierce in a later stage.
Market and demand studies
Unfortunately, in the early years of airport city and aerotropolis planning, airports often asked airport consultancies for a master plan. Lacking the expertise of regional economic development and urban planning, often the same academic blueprint was used without conducting in-depth market and demand studies. Asked who the target group of tenants and investors would be, the common answer was that the aim was to attract international headquarters by offering premier office space.
The ugly truth is not every airport city or aerotropolis can attract international headquarters to their location. It is paramount to investigate a good strategic fit of tenants in terms of size, origin, industry and so forth, and tailor the built environment and provided infrastructure to the needs of future tenants.
Research has clearly shown that companies of distinct size and from different sectors have diverse needs when it comes to choice of location. Companies’ decision of location is a complex process and has changed dramatically in a globalised world and with millennials becoming the majority of the workforce. It is important for every airport city or aerotropolis development to define their strategic fit early and plan their developments accordingly. Too many projects fail, because the idea ‘build it and they will come’ does not pay off.
Alignment with air traffic planning
While the involvement of economists, urban designers and transport planners is vital for a successful airport city and aerotropolis plan, the strategic fit with the airport itself should not be forgotten. After all, no airport city or aerotropolis will be successful without a successful airport! It is important to understand in depth the future opportunities and limitations of route development to align these with the needs of the future tenants, i.e. the companies that are meant to locate in the airport city or aerotropolis. Before earmarking land for any commercial development, it should be also thoroughly investigated if the land will not be needed for future air traffic or other business functions that must be located close to airside.
Change the local plan
Changing the local plan is for many airports a lengthy process. In many countries airport land is determined for airport-related use only. It can be a difficult and sometimes impossible process to convince the local planning authority that commercial developments are airport-related as they increase non-aviation revenues. Non-aviation revenues can help with the profitability of an airport. Nevertheless, the airport economics are depending heavily on the regulatory regime such as single till versus dual till.
Integrated land use plan
For a mature aerotropolis an integrated land use plan is paramount. The land use plan spells out the future vision, determines the land use of every square metre and guarantees that the overall urban plan supports economic growth, social inclusion and regional wellbeing.
An aligned approach from stakeholders such as the airport, the urban planning departments of all municipalities involved and the major transport providers of the region is necessary to define the future vision and make sure that different land use zones support the overall goals.
Not many airports have the luxury to develop all real estate with their own financial means. Consequently, starting the dialogue with financial institutions, investors, possible tenants and lessee early helps to develop bankable projects. Preparing for inward investment and marketing is important for full exposure of planned developments to an often global audience over a substantial amount of time. Being clear about the target market, return on investment and overall strategic goals helps to get the interest of investors and companies alike.
Find the right consultants
Finally, airport managements do good to acknowledge that airport city and aerotropolis planning goes beyond the usual air traffic and airport planning. Unfortunately, a few of the big names in consultancy have not covered themselves with glory when it comes to airport city and aerotropolis developments in recent years, but consortiums of highly-specialised niche consultants have the knowledge and experience to deliver remarkable results. In the end, breaking down the huge task of wide-spread urban, economic, transportation, infrastructure and real estate planning into smaller projects and engaging highly-specialised professionals will not only save money but also deliver better results. Like with all big projects a systematic project management and project coordination helps to keep the different streams aligned and deliver on scope, time and budget.
While it has become fashionable in the last few years to follow the airport city and aerotropolis model, every airport should ask itself first what the aim is for using it. A typical reason for airports is increasing non-aviation revenues while for municipalities regional economic development and regeneration is usually the number one reason. In-depth feasibility studies will reveal what in the particular case and under consideration of the local circumstances fits best for the airport and the region. Target markets, size, brand, function and design should be different to other airport cities and aerotropolises if a unique strategy was developed. A fit for purpose and customised strategy will be the best recipe for a successful airport city or aerotropolis.
What I see out there a lot are airports, municipalities, governments and developers who go to architects or big consultancies and ask for an Airport City or Aerotropolis Master Plan. What is wrong with that? Everything. And nothing.
Think about what you would do if you would like to build a house for your family and you would go to an architect and say: "Please design a house for me." The architect would say: "Sure. What do you want?" Would you say: "The same everyone else has, please. A standard house that is used all over the world!" Or would you sit down with your spouse and everyone else who is supposed to live in it and think about what you would NEED?
Perhaps you plan to have a big family? But how big? And how will you cater for the need when the kids are growing up? Will that change your needs in terms of bedrooms? Number of bathrooms? The size of the living area? You may want to have a home office. Or you would like to have a yoga studio at home? Or a dance studio? Or maybe you need to have a granny-flat to finance the mortgage? You may also need certain infrastructure. You may want a driveway or a garage or even a double-garage? It is even more complicated if your spouse comes from a distinct cultural background and has perhaps very different design expectations than you have and your architect. Maybe something is kind of ‘standard’ in one country and not the other. Something that is a ‘must-have’ to actually want to move into the house in the end.
And what about infrastructure? What if you would like to have a music studio at home? You would need to plan for a lot of electronic infrastructure to make it happen right from the beginning. Or is it perhaps important for you to have a smart approach where you can operate your washing machine, coffee machine, the printer, etc. all from your smartphone? Or where you get a message on your smartphone that you should leave now as the bus will arrive in 5 minutes? And what about the location? Where is it supposed to be? Close to the kids’ school? Close to family? Close to public transport?
These are just a few of the questions you would need to answer. It is getting more complicated as more people are involved and as more uncertain your future circumstances are. If you do not specify all these before the design phase, the architect will still design you a nice house – a standard house, that will fit or will not fit your needs in the end. Quiet a gamble for such an investment, huh?
Now, think about your Airport City or Aerotropolis development. It will have to satisfy not only the need of one company (the family) but the need of many and for years to come. And it has to be financed. So, how are you doing it (Do you need something like a granny-flat)? And how is the market demand right now and in the future? Is it likely that someone want to rent it so that the bank believes that you can pay back the huge loan? How will you estimate the current demand for offices (how many bedrooms and bathrooms of what size do you need now?), and in the future (when the family grows, or the kids are growing up)? And do you only need offices or maybe other developments such as a convention centre, hotels, etc. (a yoga studio, a home office, etc.)? And what about infrastructure? Do you need roads (a driveway), public transport? Do you need high-quality IT infrastructure (a smart approach)? What else do you need to satisfy the needs of your current potential tenants (your spouse) and the ones of your future tenants (your future children, your lodger)?
Seems a bit overwhelming to know all of this in advance? That is for what we are here for: Connecting the dots for sustainable development and helping you building an Airport City or Aerotropolis that is meaningful, successful and bankable.
Once we are finished with our research and analysis, you can go to an architect and say: "Please design me a beautiful Airport City or Aerotropolis. And these are the requirements. These are our needs." And you can go to the bank and investors and say: "This is our strategy. That is how we plan to pay you back."
The result will be an Airport City or Aerotropolis to be loved by future tenants and investors.