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Markets and Opportunites - Planning and Building in India

“Incredible India” aptly describes the Indian market. The property market is extremely diverse in a country with more than 1.2 billion people living in an area of approximately 3,287,590 square kilometers – nine times the size of Germany. The constantly growing market has enormous potential and planners have various possibilities to get a foothold there, maintains architect Sven Schmedes, who runs a German project management office in Mumbai.

Sven Schmedes, Architekt Dipl.-Ing. (FH), was born in Hanover in 1973. Schmedes is an architect who specializes in project management. Since 2005, he has worked on various construction projects in India. He was Managing Director India for the gmp Architekten von Gerkan Marg und Partner office until 2007, and was subsequently responsible for Indian projects as a partner for Foster + Partners until 2009. In 2008, Sven Schmedes moved to Mumbai with his family, and in 2009 he found the company German Project Management India Pvt. Ltd. The office manages projects for German and Indian contractors.

Even though the author of an article entitled “Economic Trends at the End of 2011/Beginning of 2012” in Germany Trade and Invest sees slower growth overall, nevertheless the need for infrastructure and particularly residential building in India’s seven largest cities is huge. In a five-year plan from 2012 to 2017, the Indian government intends to increase investments in infrastructure to US$ 1 billion. The infrastructure sector is therefore one of the most important growth engines for the construction industry. Transportation networks have to be expanded, the energy and water supply has to be improved. The capacities of ports and airports also need to be extended considerably. In addition, there are plans to build and expand around 30,000 km of motorways by 2016. According to a study conducted by Cushman & Wakefield, India will need nearly 20 million square meters of additional office space by 2013, and organized retail needs some 4 million square meters of commercial space. Furthermore, the study found that there is a need for up to 700,000 hotel rooms in all categories.

For German planners working in India, from acquisition and commissioning to execution, is a challenge at every phase. The special conditions notwithstanding, architects and planners would be well advised to become active in India on account of the great development potential in the property and infrastructure sector there. Architects and engineers have the following possibilities to enter the Indian market:

1) Open architectural competitions
So far, open architectural competitions have been few and far between. But project developers are increasingly staging ideas competitions, to which mainly internationally active architects are invited. Due to the specific requirements of the project developers, “newcomers” should be aware that planning based on German or European standards often cannot be implemented and plans generally have to be reworked several times.

2) International tenders
International tenders for planning services usually take place for so-called public-private partnership projects in the infrastructure sector and are geared primarily to consortia.

3) Collaboration with German companies
An interesting possibility for getting involved in projects in India is to work together with German companies that already have a foothold in the Indian market and are building up their production sites. This cooperation gives both the planners and the companies a certain security.

4) Direct acquisition
Direct acquisition means introducing yourself as a planner to the Indian project developers and presenting suitable references, in order to be invited to submit proposals for new projects.

Planners who would like to enter the Indian market should have a great deal of patience and be ‘all-terrain’. Furthermore, it is important to understand and accept local conditions. On this basis, you can subsequently develop solutions in planning and execution. India is the future!”

Expertise and adaptability
Contractors and project developers appreciate German reliability and technical know-how, especially when it comes to engineering. The most important prerequisites that planners should have in India are patience and flexibility. Continual adaptation of the space allocation plan to changing market conditions and tedious approval procedures in planning and execution often result in planning changes and can lead to unforeseen delays. “German engineering” therefore has to be adapted to local conditions to meet users’ respective requirements in different regions of India. Especially regarding building technology and façade planning, more economical, robust, low-tech systems are often favored in India. In the choice of façade systems, aside from simplified production and installation, particularly low investment costs and local availability are decisive. Local production, transport, and installation possibilities should therefore be considered early on in planning. The biggest challenge by far facing all participants is the building execution. Complicated details involving high requirements for precise execution with low tolerances have to be reworked at the construction site at the latest, as they usually cannot be implemented or are impractical. Often, non-Indian planners underestimate the omnipresent deadline constraints and cost pressure, as well as the restricted working conditions, for example during the monsoon season (June to September).

Environmental certification
Environmental certification based on the American LEED system (Leadership in Energy and Environmental Design) of the U.S. Green Building Council is now standard for new building projects in the high-end segment of residential, office, and hotel construction. An increasing number of new building projects are registered with the Indian Green Building Council and certification of at least LEED Gold is striven for.