As national and foreign investors take keener interest in the regional hospitality market, developers are ever more frequently inviting well-known western architects to realize large-scale regional projects. Although their services are way more expensive, the customers assume that world-renowned architects heighten the appeal of their properties to investors.
Touching a Masterpiece
The involvement of world-class architects in large-scale real estate projects developed in Moscow and St. Petersburg has long become a standard practice. The development company Capital Group was one of the first to invite a foreign architect. In 2003 Dutch architect Erick van Egeraat developed the residential complex Russian Avant-garde and the Capital City project of two skyscrapers on the territory of Moscow City for the Russian developer. Famous British architect Norman Foster, in a partnership with Shalva Chigirinsky’s ST Development, won the tender for the reconstruction of New Holland in St. Petersburg. In Moscow the architect designed the 600-hundred-meter tower Russia in the Moscow City on demand of the same company while the Italian architect David Fisher developed a project of revolving tower for Mirax Group — the so-called dynamic architecture. Individual stories may rotate independent of each other round the central axis driven by the wind energy.
Dominique Perrault designs a new building for Mariinsky Theatre in St. Petersburg while Grimshaw & Partners develops a project of a new terminal for the Pulkovo Airport. According to expert estimation, foreigners account for 5% of the entire design market in both Russian capitals.
This year saw a remarkable trend — Russian regions started inviting the stars of the world architecture. Thus Erick van Egeraat signed contracts for the design of the retail and leisure center Vershina in affluent Surgut. The building will remind of a broken ice-floe. The architect assumes the retail center in Surgut will be his first completed project in Russia. Its commissioning is slated for 2008. Japanese architect Kisho Kurokawa will tackle the design of another retail-entertainment complex in Yekaterinburg. The architectural concept for the Sentinels of Urals business center was suggested by French architects from Valode & Pistre studio. The complex will comprise the 41-story 218-meter-high northern tower and 36-story 195-meter-high southern tower conceived as sculptures of bronze giants, the city guards, also marking out the boundary between Europe and Asia. The towers will be linked by a two-level passageway outwardly reminding of a triumphal arch. Lying close by will be low-rise developments with the aggregate space of around 91,000 sqm including the 37,000-sqm parking space. Class A office space, apartments, a recreational area and a restaurant will be accommodated in the high-rises. The adjoining low-rise development will house services, retail, cafes and car parks. However the most large-scale and “futurist” projects designed by the stars of the world architecture are planned in the Urals hospitality real estate segment. No wonder given that this segment presently promises the highest yields to investors in the long run!
Hotels on the Make
Regional hotels of Soviet mold have long become obsolete and defy any classification, whereas the demand for quality hotels keeps constantly and dramatically rising. As reported by the marketing agency Abarus Market Research, the Russian hospitality market is estimated in monetary terms at about $2 billion and its rates of growth — at 20-25% per year. As reported by Colliers Int., the unmet demand in the regions outweighs the accommodation supply by 15-30%.
The growing demand for hotels has given rise to a number of ambitious projects in the Urals with the involvement of western architects. Thus Asia Group attracted Italian architects from Paolo Bodega Architetto to help create the project of a 165-room Holiday Inn Chelyabinsk Riverside Hotel with a restaurant, gyms and a 200-seat conference hall.
Uralia-Progress delivers a large-scale hospitality project in Perm with the assistance of German architect Herbert Kocht having rich experience in the development of hospitality complexes such as InterKontinental in Salzburg, Austria. Construction on the 400-room four-star business-class accommodation facility will start in 2008 on the area of 48 hectares. As we were told by alternate director of Uralia-Progress, Sergey Stashkov, the designers gave up on several buildings with a traditional plan, typical of Russian resorts, and opted for a circular plan instead. On one side the windows will face a pinery and on the other side — a courtyard with a garden. The program includes a 1,500-seat conference hall, 10 VIP-class villas, a SPA salon with a swimming pool, a waterpark and a downhill slope. The project’s main know-how will be an outdoor all-season heated pool.
Know-how from Western Architects
The first five-star $160-million-worth hotel of the Hyatt chain is being developed in Yekaterinburg on the river Iset with the assistance of the French architects from Valode & Pistre studio. According to construction manager David Oganian, this is actually a joint project of UGMK acting as general investor, the French company Bouygues acting as prime designer and contractor, Parisian architectural bureau Valode & Pistre and the Yekaterinburg-based investment-construction company Verkh-Isetskaya. The hotel building will resemble a large glass box with an interior finish in the Russian style. The building facade is mounted using a special know-how technology comprising three layers of glass with a metal grid and the air cushion in between for ventilation purposes. This is a rather sophisticated system that can stand severe frosts.
In addition to the building architecture, the French also developed the hotel design. The program comprises 300 rooms including presidential apartments, a guarded 135-car underground garage, 4 restaurants, a congress hall, a pool and SPA clubs with a fitness center. Every room of Hyatt Regency Yekaterinburg will be unique in terms of fit-out and furniture ordered from the best manufacturers of Europe and Asia.
Perhaps the most grand-scale architectural project delivered with the help of the world architecture celebrities can be expected in Khanty-Mansiisk, one of the most affluent cities in the Urals region. The 280-meter-tall 56-story skyscraper Diamond Crystal will be raised on one of the seven hills surrounded with a virgin conifer forest and will comprise several buildings under a glass roof with the total floor area of 161,000 sqm. The program includes office and retail space in addition to two accommodation facilities — a 200-suite five-star hotel and a 350-room four-star inn. The investor is Shalva Chigirinsky’s STT Group while the design is tackled by world-famous British architect Norman Foster known for the design of the 300-meter-tall tower of Kommerzbank in Frankfurt.
The project authors promise that the building will resemble a cut diamond with the sun reflected in its countless glass panels. Solar batteries placed on its surface are so designed as to generate enough electric power for the skyscraper’s needs. State-of-the-art materials will bring energy losses to minimum and the architects promise that the construction will in no way jeopardize the environment as the skyscraper will be fitted into an open space between the trees.
Dearth of Trained Personnel versus Fashion Trend
At the present time foreign architects use two main ways of entering the local market — through a victory in an international design tender or through the acquaintance with regional developers at international conferences and exhibitions.
According to the experts, the main reason behind the hiring of foreign architects is the lack of experienced and skilled domestic architects and designers. “The developers of residential real estate may not have the expertise of all subtleties involved in the design of such an intricate facility as a contemporary hotel. The result is typical blunders like the discrepancy between the hotel location and its class, equipping a hotel building ‘on the run’ or a belated search of the personnel and management company which further extends the hotel recoupment period which is not a short one anyway,” comments Igor Galitsyn, CEO Becar Commercial Property.
Natalia Seliunina, marketing manager for Holiday Inn Chelyabinsk Riverside, subscribes to this opinion: “Russian architects also come out with pro-Western projects. This is still a new culture for us not only in terms of the project specificity but also in respect to interaction with the client. We want to avoid any risk of dealing with local architects and turn to foreign experts in order to offer guaranteed service to our guests.” This is how Natalia Rozhkova, head of the architecture division at Yekaterinburg-based construction company Stroyservice, explained her unwillingness to deal with local architects: “Foreign companies have richer experience in high-rise development; just a couple of years ago none of our architects was building anything higher than 16 stories. Therefore our market proved unprepared for this construction boom. Our architects were reared on Soviet standards and codes while Western architects are more liberated in their projects and never fearful to introduce novelties. Furthermore they have new technologies and approaches in their possession which our specialists are lacking.” Another reason is the growing number of foreign companies investing in the Russian hospitality market, and they are interested in attracting Western experts.
Other specialists point out that the main motivation of those local developers who invite foreign architects is to promote the image of their facilities and thereby increase their value. FPC Development’s Alexander Popugaev believes that a foreign architect involved in a project is tantamount to a quality warrant and greater investment attractiveness of a property. Clients are willing to pay more for a resounding name because it pays off later on.
Pitfalls
According to different estimations, the fees of Western architects account for 15-20% of the total construction costs, on average; in absolute figures this is $50,000-200,000 per sqm. Local architects normally charge twice or thrice lower prices. However developers do not grudge as the services of foreign architects pay off due to shorter design periods. “Foreigners have a well-coordinated team allowing the minimum project development time — from three to six months — while our architects kill much time sorting out a team,” says Ms. Rozhkova. On the other hand, higher selling prices can make up for the fees of foreign labor with interest given that the eminent name increases the average per sqm prices by 30%.
However high fees are not the only pitfall awaiting developers dealing with overseas architects. The Russian law says that only a licensed Russian architect has the right to agree the project with the municipal authorities. Hence the alliances between Russian and foreign architects: Western bureaus come up with creative ideas while domestic companies prepare the blueprints. Thus Valode & Pistre cooperates with Russian designers from the Yekaterinburg Master Plan Workshop and with Uralgrazhdanproject as far as the engineering preparation of the site is concerned.
But even this scheme has its pitfalls. A project fully developed by foreigners may stall at the government coordinating bodies because of unconformity to the domestic fire-safety or sanitary standards. Thus the project of the retail-business complex Smolensky Passage in Moscow designed by Spanish postmodernist Ricardo Bofil was so drastically modified by different authorities that the architect altogether renounced his authorship.
In spite of certain discrepancies in the work of foreign architects in the land of Urals, experts are positive that the number of hospitality projects with their involvement will keep rising. CEO RIGroup Development, Andrei Khalturin, points out that almost all modern landmarks are developed with reference to the experience of U.S. and West-European experts and this practice is coming to Russian regions as well. Thus architects from all over the world now work in China while French, German and Austrian architects participate in the London development. Yet local architects will not be left without work either. Evgeny Trubetskov, principal of Yekaterinburg-based design group Vostokproject, assumes that Ural specialists should train organizational and creative personnel to be able to join hands with their foreign colleagues who, in their turn, need the help of local Ural experts who might assist them in adapting their projects to local specifics. And Sergey Yeremeev, director of the Chelyabinsk-based commercial real estate agency ERA, added that local architects could be actively engaged in industrial development which is on the make now.