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[IMGCAP(1)]DALLAS-Commercial real estate development has a new frontier to mine: airport cities and aerotropolises. A multibillion-dollar pipeline of mixed-use space is under way or on the drawing boards inside and outside the fences of new and existing airports from Detroit to Dubai and along all the world’s most popular travel and trade routes.

More than 500 executives from 30 countries are getting a full overview of the scope of the many projects underway worldwide at the Airport Cities World Conference and Exhibition 2008, which wraps up today at the host location, Dallas/Fort Worth International Airport. “Twenty-first century airports are not just aviation infrastructure. They are multi-modal, multi-functional enterprises that really are driving commercial development, not only on their property, but many miles out,” says John, D. Kasarda, director of the Kenan Institute of Private Enterprise at the University of North Carolina in Chapel Hill. “The airport city is not an option, it’s a necessity.”

It’s not just about developing land. It’s smart planning and innovative designs to ensure sustainability and profitability as consumer travel and supply chain trading routes break down global barriers. The core of the equation is the airport city, with terminals and runways just part of the concept. The aerotropolis is the surrounding larger region.

[IMGCAP(2)]Many existing major airports and almost all new ones have vast land banks reserved for office, industrial, retail, hospitality, residential and entertainment development. The acreage is a gold mine for airport tills and the reward is the revving up of an economic engine with an annual impact to match or exceed D/FW’s, now at $16.6 billion and rising. The D/FW airport board is deriving 66% of its annual revenues from non-aeronautical sources, including natural gas drilling, and Atlanta has hit 67%. The revenue is the direct result of land development and on-airport commercial facilities, Kasarda told conference-goers.

The first phase of the world’s newest airport city, Rajiv Gandhi International Airport in Hyderabad, India opened in late March. The 5,500-acre greenfield airport has a 10-mile by 20-mile area around it that’s now being mapped out for an entertainment and hotel district, wellness and tourism district, conference and convention centers, mixed-use residential, nanotechnology park and gem park. On the airport, there will be a themed village with shopping and dining, four-star hotels attached to terminals, corporate office zones and convention center.

The 2,500-acre first phase has cost upward of $1 billion. The start of the second phase “depends on the saturation of this,” Sunil Kumar Arora, general manager of India’s 126 airports, tells GlobeSt.com. India with 44,000 acres reserved for its airports is the third largest landowner in the country.

Hyderabad International Airport, though older and smaller, is being kept on line. The plan is to link the two airports by commercial development with an information technology corridor and ancillary mixed-use space. “It will improve the IT business as well as the real estate business,” adds Ramachandran Srinivasan, general manager of the Airports Authority of India.

[IMGCAP(3)]Rajiv Gandhi will be linked to Downtown Hyderabad with a 20-mile elevated expressway for an aero train that’s being touted as the longest in the world. “They had the opportunity to design this as an airport city and aerotropolis from the start,” Kasarda says. “That’s important because it’s your calling card. It’s the first thing people see and it’s the last thing people see.” The “city of the pearl” has used the jewel as its branding, with all entrances and exits designed to “give a sense of place,” he says.

Similar development stories, some even larger, are unfolding in China, the Netherlands, the Middle East, Europe and the US, which will be featured in subsequent articles. The international conference for airport cities will be in Athens in 2009 and Beijing in 2010.

“The caveat in the rush to the airport city model is,” Kasarda stresses, “don’t forget, first and foremost, that a successful airport city requires a successful airport for moving passengers and cargo efficiently. Good airport cities have to have good airports.”

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