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his own take on the ongoing debate around the current airport concession model Williams says: “Rather than hearing ongoing
Christian Dior has a strong pop-up presence in the Heinemann duty free store.
into next year for Terminal 3 which is the Qantas terminal,” he says. Regarding the Qantas terminal,
the lease was acquired by the airport in September 2015. Williams says most of Qantas’ leases are due to expire on 30 June 2019. “We have 38 leases out of 54 that
will come up which provides us with an amazing opportunity do an entire re-working of that terminal.” Since joining the airport in 2014,
Williams has been at the heart of an extensive terminal refreshment programme. “My first project was the landside food court which was followed by the Terminal 2 redevelopment. “We are now moving on to
Terminal 2 and Terminal 3 and will return to Terminal 1 in 2020. Once you finish you start again.” Offering an insight into the
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commercial lease structure at Sydney Airport, Williams comments: “We do five-year leases. Our leases are structured in such a way that they are almost identical to the standard lease you will find in a shopping mall like a Westfield. “Five years is our standard and that
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provides [sufficient] opportunity. Two or three years go by very quickly and before you know it you are back into re-leasing.” Pressed by TRBusiness to offer
“This year we are tracking very nicely. We are 100% leased and if you look at the health of the business we have no rent outstanding with tenants.”
Glyn Williams, Sydney Airport
The Burberry store in Sydney Airport International Terminal 1. 22 TRBUSINESS JUNE 2018
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embracing innovation and digital must not be underestimated, Williams emphasises the need for any digital model to embrace all airport operators. “I am mindful of the fact this is not
just about Heinemann,” he explains: “Our reliance on duty free revenue
debate and criticisms by some operators which state airports must change concession models, maybe retailers need to be more creative in terms of coming up with opportunities to secure additional revenue.” The awarding of the seven-and-
half-year duty free contract to Gebr. Heinemann in 2014, led to the opening in 2015 of the world’s largest standalone airport DF store in Terminal 1 (Departures Pier B) spanning 5,751sq m. A successful airport commercial
offer is built around strong relationships between landlord and retailer, much like the one between Sydney Airport and Gebr. Heinemann. “The relationship we have with
Heinemann is so good that last year we jointly created about 20 separate new projects inside the stores,” Williams explains. “They probably implemented
about three quarters of those projects and bought forward a capital spend planned for 2018/2019 into 2017 because they saw additional growth opportunities. This is the way we operate together.” While the importance of
has decreased because we have secured greater revenue out of other retail elements. “Going back a few years, duty free
comprised around 62% of all retail revenue in Sydney Airport. Now it is getting closer to 50%.” He adds: “To me, any digital model
must embrace all operators within the airport and not just the duty free retailer. “That said, Heinemann has a
wonderful digital group internally, while I also have my own including a Head of Strategy.”
Challenges to business The halving of the duty free tobacco allowance in Australia from 50 cigarettes (or two packs) to one pack of 25, effective 1 July 2017, only really compounded the insignificance of the category from an arrivals perspective. “Tobacco on arrival is now
insignificant from a revenue perspective,” says Williams, “but outbound is different. It is still part of a requirement for some people”. He questions: “If they want to ban
tobacco sales in airports, why not cut it out everywhere? Why single out airports? “If someone is a smoker they are
going to buy wherever. Why can’t an airport sell tobacco products like stores such as 7-Eleven or elsewhere?” While refreshing each terminal
remains a key focus, “what we are really focused on is the experience side and the very fact that to us it is the new value. This is how we need to create the difference at the airport,” he concludes. «
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