LIGHT, NO HEAT: Skylights on the roof, equipped with "smart" reflectors, adjust themselves according to how much sunlight or cloud there is while blocking out the heat. Photo: Chew Seng Kim

CHANGI Airport - Singapore's most internationally recognised shopping hub - has awarded a major contract for duty-free shopping space to incumbent DFS Group.

Six of the industry's big guns made multimillion-dollar bids for the highly sought after tobacco and liquor licence, with an eye on the opening of a new retail belt in Terminal 3.

DFS Group once again bagged the licence, against competition which included South Korean retailer Hotel Lotte Duty Free and Singapore's Nuance-Watson.

The stakes were high - a three-year contract with an option to renew for a further two years, covering not just Terminals 1 and 2, and the Budget Terminal, but also T3 which opens on Jan 9 next year.

The Civil Aviation Authority of Singapore (CAAS) awarded the licence to DFS, which currently runs a chain of 12 liquor and tobacco stores at the airport, although Hotel Lotte Duty Free had the highest bid.

 

MORE SPACE: Terminal 3 will have 132 check-in counters, compared to 160 in T1 and 144 in T2. T3's anchor tenant is Singapore Airlines, which plans to move more than half its operations from T2 where it is currently housed. Photo: Lim Wui Liang

DFS, which raked in sales of more than $250 million last year, offered CAAS a minimum monthly guarantee of $10.17 million in Year 1, with the amount going up to $10.5 million by the third year.

The South Korean retailer's bid was a guaranteed $10.49 million a month.

The amounts are on top of rent payable for shop space.

BACK TO NATURE: With its cascading water and a 500m-high wall of creepers, the new terminal has more than a touch of nature about it. T3 also has a 350-room airport hotel with a swimming pool, restaurants, conference rooms and a spa, among other facilities. Photo: Lim Wui Liang

Confirming that the tobacco and liquor tender went to DFS, a CAAS spokesman told The Straits Times:

"Bid price is not the only criterion in our assessment of tenders...DFS has submitted the best overall proposal with a competitive bid and an interesting retail and business concept."

DFS Group chairman Ed Brennan said: "We are committed to making Changi's liquor and tobacco concession the best in the world by bringing new product launches and innovative presentations here first."

The company, which has operated at the airport since 1981, will take up 1,600 sq m of shop space at the new terminal, compared to 1,400 sq m at T2 and 1,300 sq m at T1.

The new terminal will have 100 shops and more than 30 food and beverage outlets.

This is in addition to the combined 160 shops and 80 food and drinks outlets in T1 and T2.

The opening of T3 will add 21,000 sq m to Changi Airport's retail and food and beverage space, bringing the total to 50,000 sq m.

MORE SPACE: GIANT PASSENGER HOLDING AREAS: Unlike the two existing terminals, T3 will house two giant passenger holding areas that will serve up to five flights at the same time. The area is big enough to seat 2,000 passengers. At 380,000 sq m, the new terminal is Changi's biggest. Photo: Terence Tan

Revenue from non-aviation fees and charges at the airport came up to $1.04 billion for the 12 months ended March 31 last year.

Retail and dining was a major component, making up about 60 per cent of this sum.

So far, nine tenders have been awarded at T3, the CAAS spokesman said, with many more to come in the next few months.

The other keenly watched fight is for the perfumes and cosmetics concession which incumbent Nuance-Watson hopes to hang on to.

The winner is expected to be announced in July.

The next few months will see a flurry of activities as retailers and other tenants move in to the new $1.75 billion T3.

CAAS will continue to work closely with its retail partners to offer travellers and visitors the best shopping and dining experience possible, its director (commercial) Lim Peck Hoon said.

She said: "The airport retailers and brands understand their business best and are experts in their own areas.

"They must be given the opportunity to really showcase their expertise... We make sure we select the right candidates and the right product mix."

She added: "We want Changi Airport to be a destination in itself."

karam@sph.com.sg

Top photo: Lim Wui Liang