Land here, take off: Airports key to urban growth

Airports are shaping business location and urban development in the 21st century as much as highways did in the 20th, railroads in the 19th, and seaports in the 18th, according to property research.

Analysis of New Zealand's major airports and their land use has found that airport owners are morphing into "entrepreneurial landlords" through real estate-related business ventures unconnected to processing passengers and cargo handling.

The study, by Bayleys Research, has highlighted that real estate development and leasing is bolstering core aviation business activities and revenues. Bayleys' national director commercial and industrial, Ryan Johnson, said of the research: "Airport-owned/controlled property buffering the country's biggest airports is being transformed by a range of commercial, industrial, retail, and hospitality developments, including master-planned precincts of significance to wider regional property markets and economies.

"Heading the pack, Auckland International Airport continues to evolve as it rolls out its multi-billion dollar, 30-year programme to create 'the airport of the future'."

On the airport fringe, master-planned The Landing Business Park is being developed. With 150ha earmarked for development in six stages, The Landing is already 40 per cent built out.

Leasing vacancy levels in the airport corridor are at historic lows, according to Bayleys Research, sitting at around 0.9 per cent, down from 1.5 per cent last year. This despite a hefty increase in available space.

Auckland airport earns concession revenue from a range of retail businesses in both the domestic and international terminals.

Total retail income for the 2018 financial year was $190.6 million, up by more than 17 per cent on the previous financial year.

Johnson said Bayleys' analysis pointed to similar property dynamics playing out at other New Zealand airports.

On the fringes of Queenstown airport there has been extraordinary commercial development in recent years with the Remarkables Park Town Centre, Five Mile Centre and Queenstown Central precincts springing up.

At Tauranga airport, commercial and industrial property directly surrounding the terminal and airfield remains highly sought-after and is largely on airport leasehold land. Tauranga airport requires the hangars facing the airstrip to be used for aviation-related purposes.

Nearby in Hamilton, surrounding New Zealand's second-busiest commercial airport, is the master-planned Titanium Park. A joint venture between McConnell Property, Hamilton airport and Todd Property, this business park has the key attraction for tenants of being bound by two state highways, with State Highway 1 a few kilometres away.

- Material supplied by Bayleys