Appendix A19 Commercial Facilities Requirements
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A Second Runway for Gatwick Appendix A19 Commercial Facilities Requirements Gatwick Airport Davies Commission Submission Second Runway facility requirements 01/05/2014 Contents 1. Introduction 4 2. Methodology 5 3. Estate Assessment 7 4. Key Drivers shaping future facility requirements 30 5. Future Airport considerations 37 6. Forecast Scenarios 41 Appendix Market Commentary Market Assessment Gatwick Airport -Second Runway Facility Requirements 2 Introduction and Methodology Gatwick Airport -Second Runway Facility Requirements -Working Draft 3 Introduction In2012,thegovernmentaskedSirHowardDaviestochairanindependentCommission,taskedwithidentifyingandrecommendingoptionsformaintainingtheUK’sstatusasaninternational hubforaviation.TheDaviesCommissionisexaminingthescaleandtimingofanyrequirementforadditionalcapacityandisidentifyinghowanyadditionalcapacityshouldbemetintheshort, mediumandlongterm. GatwickAirportLimited(GAL)hasidentifiedtheconstructionofasecondrunwaytothesouthoftheexistingrunwayaspartofthesolutionfortheSouthEastofEngland’santicipatedfuture runwaycapacityrequirements.Gatwick’sresponsetotheDaviesCommissionproposestheexpansionofGatwickaspartofa‘constellation’ofthreemajorairportssurroundingLondon.It wouldbedeliverableusingexistinginfrastructureandisexpectedtocreatelessenvironmentalimpactthanotherkeyproposals,includingHeathrowandStansted.Gatwickbelievesthis constellationvisionisthebestsolutionforpassengers,forLondon,andfortheUK. DeloitteRealEstate(DRE)hasbeencommissionedbyGALtosupportGatwick’ssecondphasesubmissiontotheDaviesCommission.ThisreportfollowsaninitialsubmissionmadebyGAL totheDaviesCommission.Itisintendedtosetouttheanticipatedfutureairport-relatedfacilityrequirementsthattheexpansionoftheAirportcouldgenerate.Thestudyalsosetsoutthe benefitswhichwillresultfromthedevelopmentofcommercialfacilitiesattheAirport. GALisseekingtounderstandthequantumoffacilitiesthatwillberequired,baseduponforecastpassengernumbers(providedbyGAL)asat2030,2040and2050.Theforecastisbased uponapreferredrunwaydesignoption.Futurecommercialfacilitiestobeconsideredinclude: • Offices • Hotels • Industrial/warehousing&motortransport • Cargo • Hangars • Carrental • Petrolfillingstations/fastfoodandconvenience • Groundservicesandancillaryairside Thefollowingsetsoutthemethodologywhichhasbeenadoptedtodeterminethelikelyquantumofrequiredairportrelatedfacilities.Theapproachandoutputisintendedtoenableefficient airportmasterplanning. Gatwick Airport -Second Runway Facility Requirements 4 Methodology Forecasting future facility requirements is not an exact science as markets, technology and occupier requirements change overtime. This can be further complicated by changes in the passenger profile of the Airport and changes to the characteristics of passengers using the Airport. When seeking to forecast facilities 40 years in the future it is important to apply robust methodologies. The approach seekstoinitially set out a review of the existing available supply at the Airport. This baseline assessment enables an analysis of the Airport’s current use and how it compares to other similar airports. To do this, we have benchmarked other airports and explored how and why different types of airports have different types of facility requirements. The nature of an airport and the profile of its passenger base are determined by the markets and destinations which the airport services. We have identified the key characteristics of an airport’s use and the resulting impact on required facilities. We then explore the key drivers that are likely to influence the demand for future facilities, such as market conditions and the level of off-airport competition. To understand the Airport’s market position, we have reviewed both the on-airport and off-airport property provision and the level of future supply that will form competition for the Airport. We also consider the rate at which the Airport will grow (both in terms of passengers and the resulting employment numbers on-airport) as a key driver to increasing the demand for facilities. A forecast scenario is then developed applying relevant benchmarks based upon other similar airports. Key Drivers Future Airport Forecasting Estate Assessment shaping future Conclusions Considerations scenario requirements •Baseline assumptions • Macroeconomic •Forecast Passenger growth •Baseline assumptions •Facility quantum conditions •Site context •Cargo forecasts •Benchmarking •Benefit of developing on- • Market conditions airport •Existing facilities and future •Preferred Runway design •Select and apply suitable supply • Surrounding development forecast models •Changing passenger profile pipeline •Accessibility •Triangulation of results •Development capacity •Scenario testing •Current on-airport employment Gatwick Airport -Second Runway Facility Requirements 5 Estate Assessment Gatwick Airport -Second Runway Facility Requirements -Working Draft 6 Estate Assessment Survey Key facts and figures Location Thereiscurrentlyalackofhighqualityofficeaccommodationinandaroundthe GatwickAirportisstrategicallylocated29.5miles(47.5km)southofCentralLondoninWestSussex. surroundingGatwickarea(i.e.off-airport).Themarketisdistinctlytwotiered,with TheAirportisrecognisedasgeneratingdemandforfacilitiesclosetotheAirport.Thishasresultedin asignificantsurplussupplyoflowqualitystock,forwhichthereisminimaloccupier thesurroundingdevelopmentshavingahighproportionofairportrelatedoccupiesandtenantsthat andinvestorappetite.Similarlythereislimitedmodernindustrialaccommodation benefitfromtheproximitytotheAirportandtheinternationalconnectivityitoffers. availableclosetoGatwick. Site TheAirportcurrentlyhaslimitedindustrialaccommodationthatisfitforpurpose. OvertimeGatwickhasexpanded.Itinitiallycomprisedasingle,SouthernTerminalandhasgrownto Historically,Gatwickhasdevelopedlimitedindustrialaccommodationduetoalack incorporatetheNorthTerminal.EachTerminalhascreatedacommercialhub.Officeandhotel ofsuitableavailableland.Asaresult,industrialdevelopmenthasoccurredinthe developmentisconcentratedclosetotheAirport’stwoterminalsaswellasotherusesthatservethe surroundingestates.Specifically,thefacilitiesinManorRoyallocatedtothesouth needsofpassengerssuchascarrentalfacilities. oftheAirportareapproximately33%occupiedbyairportortransportrelated occupiersthatcouldpotentiallybenefitfrombeinglocatedon-airport. TherailwaystationalsoactsasahubfortheSouthTerminalarea.ItislocatedbetweentheSouth Gatwickhasonesignificantcargobuildingon-airportwhichisownedbyathird Terminalandpassengercarparksandeffectivelyactsasa‘frontdoor’totheAirportestate. party.Thebuildingcomprises291,539sqft(GEA)andisasingle,multi-letbuilding benefittingfromlandsideandairsideaccess.Duetoreducedlevelsofcargo Thesouthernperimeterisoccupiedbycurrentandformeraircraftmaintenancefacilitiesandalimited throughput,thebuildingiscurrently 60%let.However,6.7%ofthebuildingis numberofindustrialbuildings.Theseusestypicallyhavelessofaneedtobelocatedclosetothe occupiedbynon-cargorelatedusers. commercialhubsofeachterminalandaresitedonlowervaluelandareas. TheNorthZoneprovideslandforlargerindustrialrelateduserssuchasaconcretebatchingplantand Gatwickhasonlytwohangars,whichisconsideredlowforanairportofitssize siteofficesandyardsforairportcontractors. includingtheVirginHangarandtheBritishAirways(BA)hangarownedbyBA.The Airportiscurrentlyclosetosecuringanumberofopportunitieswhichwould Largescaledevelopmentcapacityislimitedduetoscarceavailableexpansionland.Thereispotential increasetheamountofhangarageon-airport.Also,astheAirportdevelopsand howeverforin-filldevelopmentinsomeareasintheNWzone.However,thecurrentAirportsite providesforagreaternumberofairlinestheremaybethepotentialtodevelop provideslimitedlandtoaccommodateadditionalairport-relatedfacilities. additionalhangarage. Thefollowingprovidesareviewoftheexistingfacilitieson-airport.Wehave Assetoverview undertakenareviewofotherairportstocomparethefacilityprovisionatother Airportrelatedfacilitiescompriseofficebuildings,cargo,transitshedsandindustrialaccommodation. similarairports,bothwithintheUKandinternationally.Thisbenchmarkingofthe Also,passengersrequirefacilitiessuchashotelsandcarrentalofferings.Other“backofhouse”type quantumoffacilitiesdevelopedattheseairportsenablesustoconsiderthe usessuchasancillaryfacilitiesandairsidesupportareasareessentialtoprovideaccommodationfor applicablebenchmarkstoapplywhenweforecastthefuturefacilityrequirements. occupiersthatcontributetotheon-goingoperationsoftheAirport.ManyoftheAirport’sexisting offices(excludingJubileeHouse)aredatedandreachingastageofeconomicandfunctional Wehaveincludedanoutlineofthebroadlandcategorisationthatisusedwithinthe obsolescence.Thereisscopetorenewandretro-fitmuchoftheexistingstockintohighquality Airport’scurrentmasterplanandexistinglandownershipboundaries. offices,whichmayappealtoaviation-relatedoccupiers.However,thereisthepotentialforthistobe morecostlythanaredevelopment/replacementoption. Gatwick Airport -Second Runway Facility Requirements 7 Estate Assessment Key facts and figures The Airport’s current draft master plan sets out the existing airport layout which is divided into eight categories. As the table below shows, these include a range of different uses and land take. Site Category Description size Runway, taxiways, safety areas, Airfield and the extensive grass areas that 228 ha surround them Including the terminal processor Passenger buildings and their adjacent and 18 ha terminals associated facilities Aircraft aprons and the terminal piers through which the majority of Aprons 161 ha passengers enter and leave their aircraft Air cargo