via Business standard
Global designs on India
by Arati Menon Carroll
Indian real estate is benefitting from the integration of global architecture and design firms. What is driving this trend?
By the end of the year Mohit Gujral, will be extending his architectural firm’s talent pool to include 30 Singaporean architects and designers in his first overseas office. Many of them will be practitioners in specific design areas like lighting or landscaping.
Edifice Architects — a Rs 300 million architecture and interior design firm with a focus on the IT, ITeS, telecom and hospitality sectors — is also looking at starting an overseas office in the Philippines by the end of the year.
Their approaches may be different — Gujral is climbing up the value chain by employing highly skilled designers, Edifice is leveraging cost efficiency and will outsource its base level drafting and 3-D animation work to the Philippines. Both, however, are means to achieve a greater scale of operations. And quick.
Some of this urgency, both admit, comes from the increasing competition on home turf. From DLF to Unitech, Ansal API and Emaar-MGF, prestigious developers are signing on architects with a global imprint and Indian architects are feeling just that little bit unsettled.
What started with the government liberalising the foreign investment regime in the $14 billion (source:Dun &Bradstreet) real estate sector and the subsequent rush of foreign investors, is unlikely to slow down.
According to a report published earlier this year in fDi — a bimonthly publication on the business of globalisation — overseas funds of about $7 billion have been announced for investment in Indian real estate and FDI in real estate is estimated to reach $16 billion by 2012 from $600 million last year.
“As a result, an increasing percentage of retail and commercial real estate development is now driven by standards set by private equity,” according to Peter Burke, a senior architect with Buchan group that is, at this time, involved with masterplanning projects in India.
“It’s not as if there’s not enough work to go around but the imbalance between the scale of construction and the supply of local architects in the country is undeniable,” concedes Gujral.
According to Vijay Sohoni of Council of Architecture, there are 40,000 registered architects in India, of which only 30,000-odd are practising — 80 per cent of these in the 10 large cities. But the problem, most say, is the proverbial quantity over quality.
When Provogue tied up with UK-based Liberty International to float Prozone, a retail infrastructure arm, they were convinced that to create true brand differentiation in the mall space, a retail infrastructure specialist would have to be roped in.
“Unfortunately local architects hadn’t had exposure to developing a mall of three million sq ft,” says Salil Chaturvedi, promoter of Provogue.
So they signed on Benoy, a UK based practise with expertise in the retail and leisure markets. “Did you know that 35 per cent of the traffic in a mall is replenishment traffic, so certain procedures for traffic flow, service entry, offloading terminals have to be followed. Local suppliers just did not have that kind of hindsight,” says Chaturvedi.
Ravi Sarangan, director, Edifice Architects, suggests that the demand-supply gap is even more conspicuous in sectors like hospitality. Edifice, who’ve chosen to focus on hospitality for precisely this reason, themselves collaborate with foreign architects to gain expertise.
Similarly, as John Zeckendorf of Mandala Asset Solutions — professional developers and asset managers — points out, “The concept of integrated townships are around three years old in India and 50 years old elsewhere. International architects have had time to iron out the kinks and debug problems.”
Mandala, that is currently working on mandates for eight townships, works with Australian biggies like Edaw and Buchan to ensure that land owners are able to “supply a differentiated product to a limited market”.
The fact that projects are getting more grandiose in scale and complexity is driving the need for experienced master planning and urban design specialists.
Take for instance, Unitech Grande, a super-luxury residential community with a Greg Norman golf course, that is being developed in Noida over 347 acres. The project involves 10 global architectural and design consultants.
Often developers use different firms for specific areas of design within one project. Ansal API’s 5,000-acre Sushant Golf City in Lucknow offers golf villas designed by KTGY inside an 18-hole professional golf course designed by Martin Hawtree with landscaping by Belt Collins.
There is also an upsurge of real-estate projects that wish to emulate foreign architecture. Mohali Hills, an Emaar-MGF development, is a gated mixed-use community with Spanish style architecture.
“Global design firms work with the best developers worldwide and have to their credit some of the finest landmark structures in the world today,” says a senior company spokesperson.
“When developers want iconic solutions, they tend to go with a global biggie like HOK, Renzo Piano or FX Fowle, all of whom are looking at entering India in a big way,” explains Sarangan.
But what does that do to costs? “For most projects, there is a fractional increase in cost, of say Rs 10 per sq ft, but this is easily recouped from a sale price premium of up to 20 per cent on account of better design.”
“If you have a ‘developer’ attitude with a view to flip the asset in three years you will tend to tightly manage costs. If you follow an asset owning model you want flawless and accurate designing because the cost of rewriting is very high,” explains Chaturvedi.
DLF believes it is an equitable trade-off bet-ween cost and time saving. Last year, they entered into a joint venture with a leading UK-based construction company, Laing O’Rourke, and have commenced the development of 14 projects covering a total area of 25.7 million square feet with an order book of Rs 4,172 crore, including big-ticket projects like The Magnolia, The Belaire and the Mall of India in Gurgaon.
“They give us access to the latest advances in design and construction techniques, which always shortens lead time for completion,” says a company spokesperson.
Sarangan hints at several peers whining about work being snatched away from them. But developers will tell you that there is a more than fair integration of local talent even when foreign architects are involved.
“It is always a collaborative effort. Local architects have a better appreciation of local code compliance and regulatory issues. They also possess a sound understanding of the onground social milieu which largely influences realty design and development,” says the spokesperson for Emaar-MGF.
In fact, Banerji’s lament is that senior Indian architects are actually so inaccessible that it’s impossible to tie them down to a discussion even. Mohit Gujral’s order books, for example, are overflowing with over 65 million sq ft of project work.
With the Indian real estate market getting exposed to global best practices and international standards of designing, it seems certain that only those architects who rise to the occasion will profit, while others will get relegated to undertaking routine contracting work.
As Gujral says, “With a huge infusion of funds in the market no one needs to learn from mistakes. They can afford the best the first time round.”