SYD reveals 30% of stores were trading in July; H1 retail revenue drops -20.1%

By Andrew Pentol |

Gebr. Heinemann is the incumbent duty free retailer at Sydney Airport.

Sydney Airport (SYD) has revealed that 30% of its stores were trading in July, an increase of +12% from May. The airport also reported a 97% retail occupancy rate up to 30 June 2020.

SYD, which handled over 44 million passengers to more than 90 destinations in 2019, indicated that 71% of contracted rents were abated between April and June 2020. The information was revealed in the airport’s results for the half-year ended 30 June 2020, which were released today (11 August).

Incumbent duty free retailer Gebr. Heinemann was also granted rent relief in line with its contract.

According to the report, rental abatements totalling A$52.9 million/$37.9 million were provided to retail and property tenants between April and June 2020. This is the equivalent to 62% of contracted rents by value.

The airport said that a Code of Conduct framework applied to all negotiations, adopting the principle of proportionate relief.


Financial transparency was required from tenants before temporary relief was granted and it was agreed there would be no structural changes to contracts.

Total revenue at Sydney Airport dropped -35.9% to A$511 million in the first half of 2020 year-on-year. Source: Sydney Airport

Retail revenue amounted to A$147.2 million/$105.4m in the first half of 2019, a decrease of 20.1% from H1 2019. On an adjusted basis, retail revenue was down 44%. This was reflective of a ‘fair and equitable sharing of the pain’ with tenants.

Total airport revenue reached A$511m, dropping from A$797m during the previous corresponding period in 2019.

Traffic was down -56.6% in the first half of the year to 9.4 million. International traffic fell -97.2% in July 2020 (figures are provisional and subject to change), while August month-to-date international traffic          (1 August to 9 August) dropped -96.8%.

Domestic travel was down -82% in July (figures are provisional and subject to change). August month-to-month domestic traffic (1 August to 9 August) plummeted -94.8%.

In the meantime, the airport, which is targeting up to a -35% reduction in operating costs for the 12 months from 1 April 2020, is planning to alter the duty free mix and enhance the international luxury precinct. Deals have already been finalised with fashion brands Moncler and Saint Laurent.

Sydney Airport retail revenue dropped -20.1% in H1 2019 to A$147.2 million year-on-year. Source: Sydney Airport

SYD is also planning to raise A$2bn in equity to mitigate against the impact of the uncertainty caused by the Coronavirus (Covid-19) pandemic.

The airport said: “It remains unclear how long the domestic and international travel restrictions will continue, but while they are in place, Sydney Airport’s operations are likely to remain adversely impacted. As a result, it is anticipated that Sydney Airport’s financial performance will continue to be affected.”

Regarding the equity raising, Geoff Culbert, Chief Executive Officer, Sydney Airport commented: “The equity raising will position Sydney Airport for the future. Sydney Airport took pre-emptive action at the start of the Covid-19 pandemic, putting in place significant liquidity which gave us the flexibility to monitor how the situation evolved.

“Six months into the pandemic, there remains uncertainty as to how long it will take for aviation markets to return to pre-Covid-19 levels. Accordingly, Sydney Airport is taking further decisive action to strengthen its balance sheet and to help ensure it remains well capitalised to meet the challenges presented by an uncertain Covid-19 operating environment and to ensure it is positioned for growth in the future.”



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