Business at the Speed of Flight, Nine New Investment Opportunities at the Hub of the Americas
Trinidad and Tobago has ramped up its inventory of investment opportunities with the addition of the Piarco Aeropark, an aerotropolis by design that promises to provide massive returns to investors in this country’s aeronautical industry.
Why an aerotropolis? In the aftermath of increased operational costs – a direct result of the high costs of fuel, security and aviation maintenance which have plagued the international aeronautical industry for over a decade - it is not surprising that the industry has been left reeling with cash flow issues veering decisions towards more innovative means to earn additional income to support the existence of aviation services.
No longer can an increase in service charges bolster the growing cost of airport operations as aviation investors have had less than desirable returns on their investment in the industry over recent years.
What could airports do to survive their economic doom? Traditionally the prospect of establishments being located in the immediate vicinity of airports was deemed as highly undesirable and businesses were limited to those that directly serviced the needs of the transit hub.
The result was an extensive acreage of green-field land surrounding airports. With the need to be innovative in the generation of supplemental income from the aeronautical industry, business leaders and policy makers have reassessed the income generation potential of these spaces and today the development of airport cities and aerotropolises as a means of bolstering aviation income is taking hold of many airports worldwide.
So what exactly is an Airport City and an Aerotropolis? The term was coined by Dr. John Kasarda Kenan, Distinguished Professor of Management at the University of North Carolina’s Kenan Flager Business School and sought after by airports and governments around the globe for his expertise in the planning of airport cities and aerotropolises.
An airport city refers to an "inside the fence" airport area including the airport (terminals, apron, and runways) and on-airport businesses such as air cargo, logistics, offices, retail, and hotels. The airport city is at the core of the aerotropolis, which is similar to a metropolis with extensive outlying corridors and clusters of aviation-oriented businesses and associated residential developments.
What better place to develop a city than around a major transit hub? What used to be undesirable space for business has caught the attention of investors and state alike and is now considered prime real estate for the building out of a metropolis around a transit hub that provides the opportunity for constant business activity. These airport cities and aerotropolises promise those willing to grasp the opportunity, high visibility to the 24 hour, 7 days a week traffic that defines international airports, in a self-contained environment.
North America alone boasts 22 operational airport cities and aerotropolises and 16 in development with the UK catching onto the trend with 12 operational and 8 under development. Europe’s latest addition currently under development, Manchester Airport City, is touted to produce an estimated 16,000 new jobs over the next ten years.
Definitely not to be left behind, Trinidad and Tobago launched the Caribbean’s first aerotropolis, the Piarco Aeropark in June of this year through managing state agency, The Airports Authority of Trinidad and Tobago (AATT).
Located to the north of the Piarco International Airport in Trinidad and 2 minutes from one of this country’s major highways, the Churchill Roosevelt Highway, the Piarco Aeropark’s first phase of development is comparative to the 5 million square foot Manchester Airport City, at 7.25 million square feet / 168 acres of green-field land. It will be one of only 3 aerotropolises in all of Central and South America with the closest operating aerotropolis, Orlando International Airport, located in Orlando, Florida.
And which better aerotropolis to ‘set-up shop’ than in one located at the crossroads to the Americas where the world meets? Future tenants of the Piarco Aeropark will have access to the 1.1 million local, regional and international passengers who are serviced by the Piarco International Airport annually plus the estimated 269,000 annual in-transit travelers. Additionally Trinidad and Tobago boasts a highly mobile population of 1.3 million who traverse the tiny island all year round.
The Piarco Aeropark offers zones for activities ranging from international trade,
1. Hotel and
2. Conference centres
3. Retail business
8. Light manufacturing; and
9. An aircraft Maintenance Repair and Overhaul Facility
With the infrastructure – inclusive of drainage and roads, already built, the AATT is offering land on a green-field basis through an RFP process. According to Marketing Manager for AATT, Mr. Emmanuel Baah, it is anticipated that signing of the first set of leases will start in early 2015 with construction commencing later in the year based on the complexity of the proposed designs.
High on AATT’s prospecting list for investors are manufacturers and importers and cargo service companies; aviation related services; hotel, conference center and hospitality related services; foreign manufacturers seeking a base to export to Latin America and the Caribbean; retail and entertainment companies; and companies involved in the construction and leasing of office buildings.
Requests for proposals will be done on a phased basis for different areas at different times with evaluation of different batches of proposals at different times. The AATT has published a Request For Proposal as its first step in identifying tenants to populate the aerotropolis with a scheduled close off date for receipt of submissions set for February 2015.