Shenzhen Airport Former Terminals Transformed Into Shopping Center Project Business Plan

The capacity of Shenzhen Airport’s new terminal design far exceeds the existingpassenger flow scale and the expected passenger flow growth for an extended period of timein the future. To reduce operating costs, the old terminal will be closed for other purposeswhen the new is available. According to the status quo of the shopping center’s developmentand operation management, the thesis analyzes the environment and market of the oldterminal’s commercial transformation, and studies the problems of project location, businessmodel, risk, financing costs, expected benefits, project organization, implementation,etc. Through research, the thesis aims to provide decision support for terminal renovationproject and help Shenzhen Airport’s utilization of the existing terminal resource to maximizeits economic and social benefits.The thesis is divided into eight chapters. The first chapter introduces the researchbackground first. Based on the research status of the domestic and foreign airports’commercial real estate development and the shopping center theory, it then presents aliterature review and proposes the research purposes, significance, methods and routes. In thesecond chapter, after an introduction of the origin, definition and classification models of theshopping center, it analyzes the development condition and efficiency and studies thedevelopment trend of domestic shopping centers. The third chapter analyzes the regionalenvironment, economic environment, commercial real estate market and policy environmentone by one. Then it studies the business circle and makes a detailed description of the oldterminal. Chapter IV assesses the prospects for the shopping center market, analyzes theconsumer groups around the airport coverage and market positioning, compares the situationsof the surrounding similar competitors and conducts SWOT analysis of the project. ChapterV positions the project type and name, designs the commercial business conditions andbusiness models, and analyzes the policy risk, market risk, operational risk, financial risk andmanagement risk. Chapter VI describes the program of the project’s design, planning andrenovation and proposes investment promotion strategy and organizational managementstructure. Chapter VII first estimates the necessary funds and costs and discusses the fundingsources. Then it estimates the financial indicators such as project cost of investment, cashflow, net present value, internal rate of return and so on. And it conducts sensitivity analysisand scenario analysis. Chapter VIII is the summary and outlook for the thesis. This chapteradopts literature research method to collect theoretical research and business data in related fields. Meanwhile, it adopts NPV and IRR methods to analyze the project investment decisionand the methods of scenario analysis and sensitivity analysis to assess project risk tolerance.The business transformation project of Shenzhen Airport’s old terminal-AirportShopping Mall, is positioned as "the mall of fashion, home entertainment and leisure ". Theairport conducts management through the establishment of a wholly-owned LimitedManagement, and raises the necessary funds in two channels, self-financing and issuing bonds.It is a very promising business project with low development costs and strong profitability.