Fast facts about Property and Car Rental
Our Property and Car Rental business leases sites, buildings and other facilities around the airport. Leases include airline lounges, airline offices, freight facilities, hotel sites, aircraft hangars, sites on the airport perimeter, buildings such as Customs House and car rental areas. Property tenants require proximity to Sydney Airport’s terminal, airfield, key infrastructure assets and operational areas to conduct their businesses which provides a unique market to support the property portfolio.
Our investment in property saw extensive works across our terminals and airport precinct to expand capacity and improve the customer experience. This was supported by a strong revenue contribution from car rental operators, and new projects such as the new hotel to provide additional revenue streams for the future.
In 2016, Property and Car Rental revenue grew 1.5% to $204.2 million. While revenue was relatively stable for the year, the result reflected changes in lease arrangements as a result of the T3 transaction in 2015. While T3 had contributed to Property and Car Rental revenues as a lease arrangement prior to the transaction, these lease revenues were replaced by incremental Aeronautical and Retail revenues in 2016.
Delivering consistent revenue streams
Sydney Airport managed more than 332 leases during the year, with 300 rent reviews conducted across our operations in 2016. Lease arrangements provided consistent revenues for the business as we continued to work closely with our tenants. Strong occupancy rates of 98.9% reflected the high demand for on-airport facilities. We continued our focus on aviation support infrastructure opportunities such as freight, catering and office accommodation, to deliver growth in our property business.
A total of 23 new airline and other administration office refurbishments were also completed, as part of our commitment to improving the airport experience for our business partners and stakeholders.
Revenue contribution to the Group
Property and Car Rental revenue
Honouring our aviation history
Sydney Airport officially opened a new bridge linking to the Northern Airport Precinct in August as we worked to improve the airport road network. The bridge provides access to a vehicle storage area in the Northern Lands Logistic Precinct and was named after the founder of Sydney Airport, Sir Nigel Love. The naming of the bridge provides a clear link to Sydney Airport’s rich heritage in the lead up to our centenary year in 2019.
Car rental revenue growth
Following the confirmation of new contract arrangements in 2015, car rental transactions grew 3.8% in 2016. To support the growth in demand for car rental services, quick turnaround areas for car rental operators were expanded during the year, leading to increased utilisation of these dedicated spaces. Car rental operators also benefited from changes to our car parking arrangements, to make it easier for passengers to collect rental cars.
Developing our hotel strategy for the future
Construction of Sydney Airport’s first owned hotel development started during the year at the T2/T3 precinct. The new hotel forms a key part of our hotel strategy and will deliver a modern offering tailored to meet the needs of our passengers. Mantra will manage the hotel once operational, with the development due to be completed in mid-2017.
The new hotel will complement existing on-airport hotels, Rydges at T1 International and Ibis Budget adjacent to the T2/T3 Domestic precinct. Both existing hotels performed strongly in 2016 as we continued to see high demand for convenient, on-airport accommodation
Sydney Airport continues to work with our customers and stakeholders to identify further opportunities for our property business in 2017 and beyond. Future opportunities will focus on the development of commercial facilities in underutilised sectors of the airport. The opening of the Mantra operated hotel in 2017 will also leverage increasing hotel demand in Sydney. The hotel’s modern fit-out and close proximity to the airport are expected to meet the growing demand for accommodation for business travellers beyond the CBD.