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Airport real estate values: What drives growth?
Journal of Airport Management,
16
(4),
361-375
(2022)
Abstract
This paper offers guidance to airport managers who are evaluating their real estate and land asset management strategies. Through an international benchmark study of airport property values, it identifies the key factors of growth in land prices and rent levels, and quantifies the resulting increase in real estate values at the airport and in the surrounding airport area. The paper has three key findings. First, airport areas experience a long-term increase in property values across all land use categories, with the sharpest price increases taking place in the first ten years of development. Second, direct airport access generates a significant price premium, with commercial and industrial plots located in airport areas achieving higher property values and rent levels compared to competing locations that do not have direct airport access. Finally, eight key factors of growth that lead to long-term increases in airport property values are identified. The paper concludes with four key questions that decision makers should consider when evaluating their future real estate strategy.
Keywords: airport real estate; non-passenger revenue; airport urbanism; cargo
The full article is available to subscribers to the journal.
Author's Biography
Max Hirsh PHD is a professor at the University of Hong Kong and a leading expert on airport real estate development, nonaeronautical revenue, passenger behaviour and emerging ground access patterns. He is the author of Airport Urbanism: an unprecedented study of airports and air travel that incorporates the perspective of passengers, airport and airline operators, urban planners, developers and travel retail professionals. Max provides thought leadership for the aviation industry through the popular blog ‘Airport urbanism’,1 where he presents leading-edge strategies for tackling the key challenges that confront airports today. Passionate about airports and air travel, Max works with airport authorities, developers and urban planners around the world to help shape the future of airports and the cities that they serve.
Pieter Van Der Horst is Managing Director of the Airport City Academy and a leading expert on airport real estate development. Pieter has served as project director at Schiphol Real Estate and Schiphol Area Development Company, where he manages a portfolio of commercial, industrial and mixed-use properties on behalf of the world's most successful airport city developer. Pieter has also served as Chief Commercial Officer at an international airport in the Middle East and as a commercial adviser to airports in Africa, India and the Middle East.
