Jury is still out on Changi's 'Jewel'
CHANGI Airport thinks it is a "game changer" that will strengthen its position as a global air hub.
But one unimpressed observer has asked if it is a vanity project adding to Singapore's long list of shopping malls.
While the jury is still out on the $1.47-billion Project Jewel, experts agree on one thing: Changi needs a big retail fix. But an expensive project with high costs and prices could backfire.
Almost 70 per cent of the space in the mixed-use development, which will be encased in a glass-and-steel dome, will be given over to retail. Some newspaper readers saw this as a debatable use of the building's 134,000 sq m of gross floor area. One likened it to a "vanity showpiece".
The private joint venture between Changi Airport Group (CAG) and CapitaMalls Asia, which will be launched in end-2018, will also feature airport facilities, a hotel and leisure attractions like an indoor garden with a waterfall.
Make no mistake, said observers - retail operations account for a significant proportion of revenue for many airports today.
In 2012, retail sales at Changi Airport hit a record $1.8 billion, a 12 per cent increase from the year before. Retail sales accounted for 50 per cent of the airport's revenue in both years.
Mr Mohshin Aziz, an analyst at Kuala Lumpur-based Maybank Investment Bank, said the rise of the mass-market, regional traveller has boosted retail operations at airports. These travellers are big shoppers compared to business fliers.
But here's the nub of the problem: "(The developers) have to make sure they don't spend a fortune building it," he said. Otherwise, rentals would go up and so will prices. "It'd be hard to imagine who can afford to shop there," he noted.
Mr Colin Tan, Suntec Real Estate Consultants' director and head of research and consultancy, said that trying to satisfy the needs of different groups of visitors - from business passengers to budget-conscious travellers and the domestic shopper - will be a "hard task".
Ms Hung Jean, deputy chief executive of Project Jewel, said in The Straits Times' Forum page yesterday that Project Jewel will "attract tourists and transit passengers to choose Singapore as their preferred air hub and stopover destination". It will also be for the enjoyment of local residents.
Mr Greg Waldron, Asia managing director of Flightglobal, feels that getting Terminal 4 and the third runway up and running is more important for Changi's competitiveness than Project Jewel.
Mr Mohshin said that Project Jewel will become an iconic showpiece similar to Changi's famed control tower. But in deciding whether to fly here, airlines would be more concerned about connectivity, available slots and terminal charges.