Big bucks on offer at ‘Big 4’ airports via retail operations

“Of the total developed 25,000 square metre area at the new Terminal IB, as much as 5,000 sq mt has been developed for retail. DIAL would invite tenders from interested parties by end of this week and expects to complete the process of awarding contracts by next month,” said Minakshi Sondhi, DIAL head Commercial Retail.

The company would also start the process of inviting applications for leasing retail space at Terminal III by end of this year and expects to award contracts by March 2009, she added. DIAL is developing two terminals — Terminal IB, which would primarily cater to low-cost carriers, and Terminal III for both domestic and international traffic, in Delhi. While Terminal IB is likely to start initial operations in the next few months, Terminal III would be fully operational by 2010. The company is investing $2.5 billion in developing Terminal III and $75-100 million for refurbishing Terminal IB. DIAL would have a minimum retail space of 30,000 sq mt by 2010 by when both the terminals would be fully operational. It is creating 25,000 sq mt retail space at Terminal III while the remaining 5,000 sq mt would be at Terminal IB.

“By 2010, we expect retail revenues to contribute 35-40 per cent to our overall topline. Besides a flat contract fee, we would also have a revenue sharing agreement with the retailers,” Sondhi said. The company plans to dedicate nearly 70 per cent of the retail space created at Delhi airport to food and beverage. “We are yet to decide on the brand mix for retail but are looking at dedicating 70 per cent of the space to Food & Beverages. We would retail premium brands and are looking at introducing pricey offers,” Sondhi said.