Kasarda | Aerotropolis business magnets (Part 1)

How are the world’s airport city/aerotropolis developments faring? Some hugely ambitious projects in the Asia-Pacific region come under the microscope in the first of a two-part global review by Dr John Kasarda.

Today’s airports are powerful business magnets and metropolitan region economic accelerators. Functioning much like central train stations of our urban past, they increasingly attract and catalyse business activity, employment and commercial development around and outward from them.

But their impact is far greater and more spatially and functionally pervasive. Airports themselves frequently contain thousands of acres of commercial real estate ranging from terminal retail and leisure services (sometimes exceeding billions of US dollars in annual sales) to office buildings, hotels, and convention and exhibition centres to bonded and free trade zones complete with high-tech assembly and value-added logistics along with biomedical product, perishables, and e-commerce distribution.

Such commercial development has become instrumental in non-aeronautical revenues exceeding aeronautical revenues for a growing number of airports.

As major airports take on most functions of metropolitan centres, including cultural attractions and leisure destinations – epitomised by Singapore Changi’s Jewel – they have become urban realms (airport cities) in their own right.

And as the concrete interfaces where the global meets the local in physical flows of time-sensitive, high-value products and people—from fresh lobsters and vaccines to investment bankers and multi-national firm lawyers — air gateways are rapidly drawing modern aviation-oriented businesses and industries to their outlying areas.

These businesses and industries (and associated residential developments) feed off each other and their accessibility to the airport, giving rise to an extended aerotropolis of which the airport city serves as the multi-modal, multi-functional commercial and logistics core (see www.aerotropolis.com). 

Trendsetting China 

Asia leads the way in airport city and aerotropolis development and China is the region’s most enthusiastic adopter of the aerotropolis model, with more than 100 of its airports and their surrounding areas incorporating its principles.

Among the most prominent are Beijing Capital (PEK), Shanghai Hongqiao (SHA), Guangzhou Baiyun (CAN) and Zhengzhou Xinzheng (CGO). Beijing Capital International Airport — Asia’s busiest, serving approximately 100 million passengers in 2019 — is corner-stoned by its airport city logistics park (ACLP).

The $900 million ACLP consists of air cargo and air express centres, import/export warehouses, an integrated support service area with related office complexes, and bonded product exhibition. 

From 2018 to 2020, new enterprises in biomedicine, smart electronics, and cross-border e-commerce located in the airport city logistics park. The ACLP is now part of the 178-square-kilometre Beijing Airport Core Economy Zone (BACEZ) spreading into Beijing’s Shunyi District. 

The BACEZ contains more than 3,000 enterprises, including operations of over fifty Fortune 500 firms. The Shunyi portion of the zone is continuing its transition from more-traditional industries (automobile production, for example) to high-tech assembly and knowledge-based business services more oriented to air transport.

Meanwhile in Shanghai, the seamless fusion of the airport with subway, regional and high-speed rail drives an impressive airport city adjacent to Shanghai Hongqiao.

Some of Shanghai’s more distinctive office buildings make up this airport edge city. By 2020, over 300 high-end structures had been built, comprising approximately 5.6 million square metres of floor space at a total investment of exceeding $100 billion.

This includes the massive two-million-square-metre national exhibition arena (the largest in the world) along with office buildings housing international and domestic corporate headquarters, knowledge workers in advanced business and professional services, financial and trading enterprises, economic organisations, and upscale retail.

Between 2018 and 2020, prestigious international schools, a Medical Zone containing hospitals providing nearly 2,000 beds, and four five-star hotels were added.

About 650,000 people currently work in Hongqiao Airport City, also known as the Hongqiao CBD (Central Business District).

The sprawling Pearl River port city of Guangzhou has a major advantage in terms of its aerotropolis development as Baiyun International Airport serves as the hub for China Southern Airlines (China’s largest in fleet size, revenue, and passengers carried) as well as the Asia-Pacific hub for FedEx.

Yet a Guangzhou Aerotropolis had been slow to materialise, due in part to the inability to align local jurisdictions and other key stakeholders for co-ordinated actions.

The establishment of the 116-square-kilometre cross-jurisdictional Guangzhou Aerotropolis Development District (GADD) in September 2015 reconciled this problem.

Catalysed by an expanded bonded zone and the airport’s magnificent new passenger terminal, Guangzhou Aerotropolis investment accelerated between 2017 and 2020 in logistics and cross-border e-commerce, trade and exhibition, and hospitality as well as office building complexes.

Among the biggest are the 67-hectare China–Australia–New Zealand–South Korea Free Trade Business Park ($602 million) and the $1.3 billion Greenland Group/Guangdong Province Airport Authority joint venture on 33 hectares.

Both developments are just three kilometres from CAN, with the former focusing on trade, and the latter mostly on aviation-industry headquarters, financial institutions, government administrative offices and hotels.

Centred around Zhengzhou Xinzheng International Airport (CGO), the 415-square-kilometer Zhengzhou Airport Economy Zone (ZAEZ) has grown so remarkably since its formal inception in March 2013, that in April 2019 the People’s Daily crowned it ‘China’s Aerotropolis’.

Over 200 million smartphones were assembled in the ZAEZ last year, generating $44.2 billion in electronic information industry output.

Smartphone assembly parks are complemented by rapidly developing biomedicine parks, silicon wafer manufacturing facilities, hotels and office buildings as well as construction of one of China’s largest trade and exhibition complexes.

In 2019 alone, 22 major projects settled in the ZAEZ accounting for a combined investment of $11.9 billion. With its 29 international air cargo routes, CGO has been China’s fastest growing in air cargo volumes during four of the last five years.

Future China aerotropolises in planning include those around the spectacular Beijing Daxing International Airport that opened in September 2019 and in Ezhou in central China’s Hubei Province, where the provincial government is teaming with SF Express (China’s primary

air logistics provider) to develop a $6 billion air cargo airport that they ambitiously envision will be the largest in Asia with a scalable capacity of 7.6 million tonnes of cargo annually.

The article is originally published on Airport World Issue 1, 2020.