Life at the airport

Airports were once regarded as noise-polluters best banished beyond the suburbs well away from residential areas. Times have changed. Now developers are clamouring to build on the empty land that originally buffered such ports from civilisation. And with the ?airport city' concept, airports are taking on a new role: the new business heart of the city

If you ask people what they associate Amsterdam with, you might receive some colourful answers but few would talk about its airport. This is perhaps unfair. Amsterdam is noteworthy as the proud birthplace of the 'airport city', a concept whereby logistics, hotels, and offices as well as occasionally retail and entertainment facilities can all be found at or nearby the airport. Weary business travellers need no longer drive into the city centre. Now all the required amenities are provided on site, so like Tom Hanks in the film 'The Terminal', they need never leave the airport. "An airport city is a dynamic environment integrating and enhancing people and businesses, logistics and shopping, information and entertainment," the Schiphol Group, which owns and runs Amsterdam Airport, writes on its website. "This efficient, multi-modal hub for air, rail and road transport is a seamless link in the travel process that provides visitors with a unique experience." However, John D. Kasarda of the Center for Air Commerce at the Frank Hawkins Kenan Institute of Private Enterprise at the University of North Carolina defines the term 'airport city' more prosaically as, "an urban complex whose infrastructure and economy are centred around an airport offering speedy connectivity for its businesses to their distant suppliers, customers and enterprise partners." Whichever definition you prefer, the concept has now spread worldwide and examples of such developments can be found in cities as diverse as Hong Kong, Manchester and Tel Aviv. Not surprisingly, it is also debuting in the CEE region. Although at present many of the plans seem sketchy or preliminary, airport cities and other similar schemes are now being built throughout the region.

What does an airport city look like?
A fairly typical project is Airport City St Petersburg, which is being developed by a consortium of Warimpex, CA Immo and UBM. Located only 300m from Pulkovo Airport terminal 2, the first stage of the development - a Crowne Plaza hotel and a 17,000 sqm business centre - is due to open in November or December this year. All the buildings are to be joined on the ground floor, where restaurants, a spa and fitness centre and even a kindergarten are to be situated. "The idea is to eliminate the need for our tenants to leave the building. A person should be able to find anything that he wants directly on the site," says Andrey Kanivets, the general director of Airport City St Petersburg. "We don't have so much space for retail - app. 2,000 sqm, mainly for luxury products. Right now we have letters of intent from companies that sell mobile telephones, computers, and branded clothes. We wish to provide our tenants with all the necessities. Next door there's a huge shopping centre with a cinema and skating rink, as well as a fitness centre and two pools inside." When asked about the future development of St Petersburg's Pulkovo district, Mr Kanivets declared that he was certain that new businesses would soon be moving into the surrounding area. Much of his optimism was based on current development work at the airport. "With its reconstruction, the airport is to become a hub. The main idea is to become a competitor for Helsinki Vantaa airport. This is quite a tough task because currently there are 8 mln passengers yearly going through Pulkovo and 13 mln in Helsinki. Besides, there is a big industrial area 20 minutes away from Pulkovo, where Toyota, General Motors, Magna and Foxconn have premises. I have heard Hewlett Packard also wants to move there." Later he went on to say that, "Pulkovo is the fastest developing area of the city. This is why businesses are attracted here." Another typical development is Kiev Airport City, which is being developed by Asamer, Deol Partners and B&C Maculan Project Development. This time construction work has yet to start, but should begin this autumn on an 8.5 ha site. The first stage (of three) entails the construction of the office blocks, and when completed the total office space should come to over 117,000 sqm. The second stage is to be two hotels, one with four stars and the other five. Originally, the first stage was to be the hotels to accommodate the football fans that should be arriving in Kyiv for the Euro 2012 football championships. However the original plans have now been scaled back and delayed. "The project started in 2007 but was stopped by the financial crisis, after which little happened," says architect Sergey Yunakov of S. Yunakov. "We have continued to work on the concept of the project. The first concept, designed by the Austrian architectural company Moser Architekten Ziviltechiker with the architect being Mark Gilbert, was supposed to be about 300,000 sqm, but after some time the customer changed his requirements to 130,000 sqm. The project is now about half the original size. On condition that financing is secured, the construction of the whole complex should be finished in about five years, as a rough estimate."
Kyiv is not the only location to be dogged by delays or financial problems. Bratislava Greenfields, a joint venture between Reform Capital and Realiz, hopes to develop an airport city project next to Letisko M. R. Štefánika - Airport Bratislava. In 2007 it began buying up agricultural land and eventually acquired a total area of 43 ha. Then nothing happened. "We can't do anything," says project manager Michal Smolec. "The zoning plan has not changed." He insists that the decision should come through in 2012, but until then the project remains on hold. Also in Hungary, in 2008 Airport City Plaza bought a 14 ha site near Budapest for EUR 11 mln, where it planned to build a complex with hotels, a conference centre, offices, a shopping centre and even a casino, but then in 2009 the company was declared bankrupt. This, however, has not spelt the end of Budapest's airport development. Budapest's Liszt Ferenc International Airport, which is 75 pct owned by a consortium led by Hochtief, is being turned into a cargo hub and to this end Cargo City is currently being built within the airport perimeter. Completion of the first stage, which is already 80 pct leased and comprises 11,000 sqm of warehousing plus 5,000 sqm of offices, is scheduled for the autumn of 2012. The second stage will also be of a similar size. Moreover, in 2008 developer Ablon completed phase one of its Airport City logistics park, which is also in Budapest. The facility, which lies 1 km from the airport, is currently 100 pct leased. Spurred on by its project in Hungary, Ablon has also taken its airport city concept to Romania. Around 2 km from Bucharest Henri Coandă International Airport, it is developing the first stage of Airport City Bucharest, which should be completed within 18 months. It is worth mentioning another logistics project, but this time in Serbia. The Log Center project, which is being developed by Eyemaxx Real Estate and Chayton Capital, is situated next to Niš Constantine the Great Airport. Although this will mainly be a warehousing facility, offices, a hotel and a shopping centre are also planned. However, Serbia already has an airport city project in Belgrade. Developed by Africa-Israel and Tidhar Construction, it covers a 14 ha site and on completion of the final stage should comprise 12 buildings including a Crowne Plaza hotel. Yet, the project may be a slight misnomer, because it lies "a 10-minute drive to Belgrade International Airport," with the name being derived from a previous Africa-Israel project, Tel Aviv Airport City.

Show us the money
Nonetheless, this type of activity has piqued the interest of the airports themselves. Just as in Amsterdam and Budapest, they see a new opportunity to generate revenue streams from the land that they themselves own. In Moscow, Vnukovo International Airport has drawn up a master plan that includes the development of a hotel complex, conference facilities, and an industrial park, while in Poland a number of airports have announced their intentions to build such projects. Gdańsk Lech Wałęsa Airport has hired PM Group to draw up a master plan for its development until 2035, which includes an airport city with hotels as well as conference and service centres. Poznań's airport, Port Lotniczny Poznań-Ławica, has also jumped on the bandwagon, yet its airport city plans at present appear only nascent and lack substance. "The land that belongs to Port Lotniczy Poznań Ławica covers an area of more than 300 ha, of which almost half may be set aside to create a base for revenues from the non-aviation sphere," says Hanna Surma, communications manager and press officer for Poznań-Ławica. As she then goes on to explains: "The initial work comprised a project to study communications and the organisation of traffic around the grounds of the airport; the next element is the preparation of a study regarding the current zoning plan setting out the location, function as well as the spatial building order of the cubature as well as communications for all the designed functions of the Airport City. At the present time the subject of analysis is the form of the commercialisation together with the completion of their stages with a specific emphasis on hotel, office, conference, retail and entertainment functions." Warsaw's plans for an airport city seem somewhat less grandiose. According to Michał Marzec, a director of Chopin Airport, the reason to build Chopin City is because it "lowers the costs of the airport." The project is "loosely based on Amsterdam," and he assures us that when completed "we'll have another beautiful part of Warsaw." Already, the JEMS Architekci studio has drawn up the urban plan for the project. "Airport cities are being built everywhere all over the world," says Jerzy Szczepanik-Dzikowski of JEMS Architekci. "This is a result of airports being surrounded by empty space. The idea is that some of the people who come on business could sort out their affairs within the airport zone. This also concerns the services that affect other passengers. For this reason, offices and retail centres are built which can serve business travellers. Small towns too are trying to create such complexes. There exists a huge problem for airports to make themselves cheaper. So they hope to generate revenue from this unused land."

Gridlock
He later added that: "Warsaw is a specific case. The airport is situated almost within the city. The airport city model is one where a business park is situated next to the airport and is connected to the city via rail, road or metro. In Warsaw the airport lies within the city grid and its access is somewhat limited. Today, everybody knows how traffic on ul. Żwirki i Wigury - the road that leads from the city to the airport - gets jammed. The first problem is how much can be built without clogging up the traffic system in Warsaw. There's no good answer. There exist serious concerns as to this question." In order to ease these traffic problems a system comprising two circular roads has been designed, with one inside the other. The outer road is to serve the needs of the airport, while the inner one will provide access to the airport city development. Although a number of access roads will connect both the inner and outer circles, both roads should operate largely independently of each other. "The client considered a shopping centre but that would have created too much traffic. Such a facility is not really for people coming out of the airport, but more for people from the city. No project can be built here that would result in too many cars. An office project itself admittedly generates quite a lot of traffic, but much less than a shopping centre. The first is acceptable but the second is not." These traffic concerns are further ameliorated by a number of other infrastructure projects in the area. An underground railway station is currently being constructed at the airport, which will connect directly via a tunnel with the airport's terminals. According to Michał Marzec, it should also serve the airport city since all parts of the airport complex can be reached on foot within fifteen minutes. Moreover, a number of roads are to be built within the vicinity including the A2 motorway. Because of these developments Michał Marzec feels confident enough to state that the accessibility "is several times greater than the needs of the airport, so I am certain that it will also be enough for the airport city." Chopin Airport has also signed a contract with Arup, who have already worked on airport city projects in Istanbul, Manchester and Berlin, to advise on the further development of the Warsaw project.
Problematic infrastructure is a common feature across the CEE region. However, for Mr Kanivets of Airport City St Petersburg, the city's dilapidated road systems is a major positive factor for the development of the project. "The big advantage of the project is the parking area and ring road nearby. This advantage can be easily explained by the big problems with the old transport infrastructure from the Soviet times, which is not developed. It is now causing business to move to the outskirts from the city centre." Nonetheless, transport links to the city are also being improved. "By 2014 there will be a high speed tram line to the main railway station in the city centre, which will take app 40 minutes." Although he later admitted that "currently, it is a 40-minute drive to the centre." Just as for Michał Marzec the success of Chopin City seems dependent on the construction of the A2, Andrey Kanivets is also counting on a new motorway, the A9 Corridor: "In three years time, a highway from Moscow to Helsinki will be constructed that passes close by."

The birth of the aerotropolis
What most characterises these kinds of projects, according to John D. Kasarda, are the changes to the surrounding infrastructure that they catalyse. He has coined the term 'aerotropolis', to denote an integrated business region centred on an airport: "For broader economic development and competitiveness purposes, the airport city is not the most important concept. It is the aerotropolis. The airport city serves as the multi-modal commercial core of the aerotropolis which is the airport-integrated economic region. Strings and clusters of aviation-dependent businesses locate along airport highways stretching outward up to 25 km from some airports creating an extended aerotropolis," he told us. All of this development he sees as complementary to the normal economic activity of cities. "Successful airport cities have been shown to reinforce rather than compete with downtown commercial development strengthening the overall metropolitan economy." And he regards this development as so important that when asked if he thought that cities without airports were doomed to economic decay, he agreed: "Aviation will be as important to business location and commercial development in the 21st century as highways were in the 20th century, railroads in the 19th, and waterborne movement in prior centuries," he explains. If John Kasarda is right, ever more of us will find ourselves working in some kind of business that is either directly or indirectly connected with an airport. The one thing that seems to mark out the CEE region is that it is, in regards to this trend, behind the curve. But it is catching up fast.

Alexander Hayes