REAL ESTATE

The ongoing construction boom in Russia has brought about a problem that only 10 years ago none of the experts could see coming. Russian developers maintain that amid the significant growth of the construction market and increase in the number of high-end, upscale projects, this country does not have enough talented architects. However, in a market environment a lucrative niche cannot remain vacant for very long, and this vacuum is now gradually being filled by foreign architects and designers.

Foreigners in Russia

Foreign architects started working in modern Russia back in the 1990s. At that time, however, their sphere of interests was only limited to Moscow.

Some of the most conspicuous projects carried out in the Russian capital at the end of the past century with significant contribution from foreign architects include the Sov­mortrans Ltd. building in Rakh­manovsky Lane, designed by Austrians Patrick Leibetseder and P. Habrik, and the Millennium House on Trubnaya Ulitsa, designed by British architect James McAdam.

In addition, Italian architect Giovan­ni Bartoli modernized the Vesna department store on Novy Arbat and designed a network of multiplexes for the Invest Kino Proyekt company, including the Lenin Multiplex in central Moscow. The U.S.'s Altoon & Porter Architects helped design and build the Atrium shopping and leisure center on the Garden Ring.

Still, all of them were "pinpoint" projects that failed to attract broad public attention. The situation chan­ged at the start of century, when, due to Russia's rapid economic development, foreign architects were commissioned to work in a number of large cities.

In 2005, the famed Zaha Hadid presented his skyscraper project, Zhivo­pisnaya Tower, in Moscow's Khoro­shevo-Mnevniki area, to Kapital Grup, and the following year, it submitted to Moscow City Group the Expo Center project on Krasno­pres­nenskaya Embankment, and a business center project on Shariko­podshipnikovaya Ulitsa to the Domi­­nionM company. In 2008, Hadid took part in a tender for a museum center, Perm Museum XXI, in the city of Perm in Russia's Urals.

Apart from Hadid, such architecture "gurus" as Erick van Egeraat (the Netherlands) and Sir Norman Foster (Great Britain) have graced Russia with their attention.

Egeraat designed the controversial Gorod Stolits [City of Capitals] complex for Kapital Grup and the Vershina shopping and leisure complex in the city of Surgut (Russia's Tyumen Region) for SKU, a group of companies, and also became involved in drawing up a general development plan for the city of Khanty Mansiisk, Western Siberia. Nevertheless, he is certainly better known in Russia as the author of the Federatsia (Fede­ration) man-made island in the Black Sea off the coast of Sochi (the venue for the 2014 Winter Olympics).

As for Foster, it would probably not be too much of an exaggeration to describe him as the favorite architect in Russia: His ongoing projects include the development of the Rossiya Hotel site, the Rossiya Tower at the Moscow-City international business center, reconstruction of the A. S. Pushkin Museum of Fine Arts, and the Crystal Island in Moscow, a business center in St. Petersburg's Mos­kovsky Prospekt, a cultural center in the city of Vladikavkaz (the capital of Russia's North Caucasus Republic of North Ossetia), and the Yugra eco-complex in Khanty Mansiisk.

Although Hadid, Egeraat, and Foster are by far the most well known, they are definitely not the only foreign architects and designers working in Russia. The list includes: Eller & Eller Archi­tekten (Germany), Wilkinson Eyre Architects (Great Britain), RMJM (Great Britain), Valode & Pistre (France), Behnisch, Behnisch & Partner (Germa­ny), SWECO (Sweden), Swanke Hayden Connell Architects/SHCA (US), OMA (the Netherlands), NBBJ (US), ABB Architekten, ar.te.plan GmbH, ASP Architekten Schweger Partner.

The list goes on, and it is obvious that on the one hand, Russia has a big appeal for foreign architects, and on the other, it really needs them. Why are foreign architects so attractive to domestic developers?

Market Savvy

Experts do not have a standard answer to this question. For example, according to Boris Levyant, general director of ABD Architects, the growing cooperation between Russian construction companies and foreign architects and designers is due to the fact that Russian architects today are often simply unable to fully meet demand.

"There are around 12,000 architects in Russia, 3,000 of them working in Moscow or St. Petersburg, with the remainder spread thin on the ground across the rest of the country," he said.

Vladimir Dyatlov, first deputy governor of the Chelyabinsk Region, suggests that "the time when we were mainly taking our projects to exhibitions abroad in search of funds for their implementation is history now. Today, Russian investors have sufficient resources to translate their ideas into practice, but have insufficient experience in the field."

He stresses that in Soviet times, there was a special architecture and town planning agency that fully met regional demand for essential buildings and structures. "However, in the 1990s, the volume of construction plummeted, and architects were forced to move into other areas of activity. Now we have to look for designers outside of the region," he says. 

At the same time Levyant points out that if some Russian architects are less qualified than their foreign counterparts, that has nothing to do with the 1990s crisis. "Conceptually, Russian architecture was destroyed after Khrushchev, when the status of the professional architect was re­duced to zero," he says. "Consider: In the 1970s, a young ar­chitect fresh out of college was offe­red an entry level job at 90 rubles a month, whereas a graduate of a construction institute was paid 150-180 rubles. How, then, were strong, independent professionals supposed to evolve in that environment?"

Yury Khalitov, general director of the Glav Prom Stroi construction company (a part of SZNK ZAO Group), agrees in that the creative endeavors of domestic architects "were for years smashed against the concrete wall of the country's construction complex: "Bold ideas were buried in the corridors of housing and civil construction agencies, and ferroconcrete product manufacturing plants. The architects were forced to adapt to the types of products that rolled off the assembly line. Today, much has changed, but a considerable element of conservatism in their approaches is still out there."

However, development companies say that apart from a "manpower shortage" at home, construction and investment companies also have other reasons to look for architects outside of Russia.

"The principal shortcoming of Russian architects is that they are not commercially minded enough project-wise," says Dmitry Kashinsky, AFI Development project director, Stroi Inkom K. "The developer's goal is to make a project as profitable as possible. Russian architects are more concerned with aesthetics rather than practicality. By contrast, Western architects have a very good understanding of the task of deriving maximum profit out of a project."

His view is shared by Natalia Bidnenko, senior consultant at DTZ's consulting and assessment department.

"Russian architects sometimes slavishly follow construction norms and regulations (SNiPs) and state industrial standards (GOSTs), forgetting about a project's commercial component, as a result of which a building's effective useful area can be considerably smaller than if it was designed by a Western architect."

She says that the majority of Russian architects start planning a building's design from the facade, whereas Western specialists first look at interior planning.

According to Evelina Pavlovskaya, vice president for consulting at GVA Sawers, apart from the low priority that is given to the "practical" aspect of a particular project, Russian architects also tend to treat contractual obligations too lightly.

"The main distinguishing feature of foreign architects, compared with their Russian counterparts, is that they faithfully follow the letter of a contract," she says.

Cultural Diversity

At the same time, Egeraat suggests, it would be wrong to say that Russian architects are professionally "inferior" to foreign specialists.

"There is no reason to believe that Russian designers and architects are less competent than designers and architects from France, the UK, or Germany," he says. "Obviously, the approach toward architecture differs in different countries." 

According to Egeraat, the causes of the differences between Russian and Western architects should be looked for in the mentality of specialists in different countries, as well as the conditions in which they have been taught to work.

"For example, in Germany, architects pay great attention to the technical aspect, while in the UK architects are extremely conservative, and sometimes even a little ‘mechanical' in their approach," he says. "On the whole, it would probably be correct  to say that Russian architects tend to go for big ideas, grand scale, monumentalism. This is part of Russian culture."

Having said that, Egeraat notes that Russian architects are a little behind their Western colleagues because for a long time they had to work within a system where the financial component was not the main factor in the decision making process.

"Their weak point is the inability to wed their ideas with the financial aspect of a project or with a design of large-scale social or business infrastructure, which is necessary for the project's successful implementation," he says.

Levyant stresses that whatever ‘edge' Western designed projects may have over Russian projects does not apply to their level of professionalism. "Western architects working on a project, as a general rule, make use of what is already in place, what is available at their studio, and there is no need for them to create anything essentially new. The main thing for them is to ensure a project's commercial effectiveness," he says. "Once Russian designers understand that they do not have to come up with an architectural miracle every time they land a contract, they will find it considerably easier to work and compete."

Denis Gladysh, finance director of Utkina Zavod Development and a member of the St. Petersburg Archi­tectural Society, points out that foreign architects produce better results on shopping and warehouse projects, whereas Russian architects are very good in designing housing and office projects.

"Russian companies are encountering the greatest difficulties in designing warehouse facilities and shopping centers, primarily due to the narrow specifics and rapid technological advancement of these segments. Our architects are not very good at planning logistic and retail flows," he says.

Colleagues, Competitors

Ivan Kuznetsov, the press secretary of the Znak corporation (the Grand Prix project, including a world class hippodrome), says that in implementing its projects, his company draws both on international and Russian architectural experience.

"On April 24, we announced the signing of a contract with the Paris based architectural agency Anthony Bechu & Tom Sheehan for a feasibility study on a race course as part of the Grand Prix project. On the other hand, we are closely cooperating with Russian designers - in particular, the NIiPI General Plan Scientific Research and Planning Institute of Civil Construction and Town Planning of the Moscow Region - in preparing a feasibility study and a general plan for developing 7,500 hectares of an area where Znak Corp. will implement its development projects," he says.

He adds that the choice of a foreign contractor was based on the fact that the developer's goal is "to create a basically new level of infrastructure in the surrounding area."

"Therefore, we looked for a designer with extensive experience in handling such projects, as well as with the most advanced technology in the field," Kuznetsov says.

However, experts point out that giving a project to architects who are best qualified to carry it out is not the only approach in Russian development practice. Indigenous construction firms increasingly hire foreign architects to develop a project concept, and then transfer that concept to Russian designers who adapt it to Russian construction and legal standards.

"DTZ mainly works with Western architects, but once a concept is there, Russian architects are brought in, who help finalize the project so that it can quickly receive the necessary ap­provals, licenses and permits [from Russian authorities]," Bidenko says. "Therefore, Russian and foreign architects cannot be regarded as competitors." 

At the same time, Levyant notes, with this approach a Western architect as the author of a particular Russian development project only  plays a figurehead role, while the main work is done for it by Russian architects.

However, he warns, many Moscow based architects are no longer prepared to make do with secondary roles: "We are no longer into project adaptation: we either work as equals or we don't work at all."

The Costs of Doing Business

Yet another sensitive issue is the level of compensation - with regard to both Russian and Western architects.

"The cost of services provided by domestic architects is lower than that of foreign contractors," Khalitov says. "But as for a regular design bureau, the difference is not too pronounced. It becomes conspicuous when big names are brought into a project, whose fees, as a general rule, are not comparable even with a Russian design bureau's annual budget."

On the other hand, Dyatlov acknowledges, amid the ongoing construction boom and architect shortage in the Chelaybinsk Region, even entry level specialists make around 150,000 rubles a month.

Andrei Marusov, director for commercial real estate at OAO Mezh­regionalnaya developerskaya kompaniya [Interregional Development Company], suggests that the services of Russian architects can be priced on a par with or even higher than those of Western architects.

"Needless to say, this depends on each specific case, but as far as I know, all tender bids are in the same price niche," he says. "However, well known Russian architects are sometimes paid one-and-a-half to two times as much as their Western colleagues. They can dictate terms because indeed there is a shortage of talent in Russia."

Levyant says he can neither confirm nor deny that.

"An architect's entry level wage is 20,000 rubles [$830] a month, while the average wage is 36,000 to 48,000 rubles [$1,500-2,000], and that is take home pay," he says.

He acknowledges that a leading project architect, not to mention the head of an architectural studio, makes considerably more, but he cannot say how much more, citing commercial secrecy.

"The problem is that a young architect fresh out of school can, of course, make much more - say, in the country home construction or private interior decoration segment. But that will not help him become a real professional who can handle serious projects. Therefore, at the start of their career, young architects are confronted with the dilemma: either big money ‘here and now,' or good prospects and challenging projects in the future."

Still, it is not impossible to get a ballpark estimate of how much an architect working on a large project can make. According to Pavlovskaya of GVA Sawers, the majority of architects work on the so-called lump sum basis for a specific volume of work plus extra rates for any additional work.

"Sums paid for the development of design concepts can vary between 40,000 and 500,000 euros, depending on the assignment target, the scope of development, and the time frame. The price does not depend on whether the job is done by a foreigner or a Russian. Foreigners working in any Russian city always specify transportation costs and overheads - from 6,000 to 10,000 euros per visit."

True, Kashinsky of AFI Develop­ment adds that the approaches used by Russian and foreign architects also differ in the work procedure.

"A Russian studio presents a developer with an original project, then the developer makes amendments, an architect finalizes the project, more amendments are made, the project is reviewed, and so on and so forth until the project is completed. A Western studio operates differently: it provides a limited number of options. If one option is rejected, an architect charges for any subsequent options."

Representatives of virtually all construction companies are convinced that cooperation with Russian architects - that is, real professional architects - is almost preferable to developers operating in Russia.

Russian architects are more careful and attentive to the architecture of Russian cities, know more about the process of acquiring approvals, licenses and permits for construction projects, and finally, are more flexible in regard to their clients' wishes.

However, developers say thus far, unfortunately, it is far more difficult to find a good Russian architect than a good foreign one: after all, real experts who can design modern and good quality structures have orders for months ahead.

Therefore, specialists say, foreign architects are not the best possible alternative to Russian architects: it is simply that foreign designers have become a fully fledged component of the Russian construction and architectural services market where Russian designers have to compete on an equal footing.