It took an American developer seven years to get comfortable building in India. Home to the world's second-largest population, which is rapidly expanding, India is quickly emerging as a global economic player. Construction firms and other multinational companies are drawn to the subcontinent's dizzying rate of growth.
This growth can be overwhelming, and for Hines, a global real estate developer based in Houston, patience was essential to ensure its smooth entrance into India.
"We wanted to spend the time really understanding the process in India," says Grant R. Stevens, Hines India's senior managing director and country co-head. "You can't just come to a country and … overlay the protocol that worked in New York or Paris or Madrid and expect it to work."
After initially scouting for opportunities starting in 2004, Hines formally set up shop in India in 2006. From there, executives began searching for areas ripe for investment. At the same time, the firm studied local design specifications, construction methods and labor techniques, Stevens says.
Hines settled on Gurgaon, one of India's fastest-growing commercial hubs. One Horizon Center, a 25-story, 880,000-sq-ft mixed-use office-and-retail complex, is now joining that city's skyline.
Gurgaon is a welcoming place for international developers. The burgeoning business hub is home to the offices of global companies such as Oracle, Gillette and Pepsi. Situated about 20 miles southwest of New Delhi, the business-friendly suburb offers more open space and fewer regulatory constraints than developers would face in the capital city.
"Gurgaon has grown exponentially in the last eight years, with commercial, residential and retail establishments," says Stevens. "It's like the La Défense of Paris."
And like Gurgaon, One Horizon Center is an international project. Before groundwork began in 2011, Hines engaged in a joint venture with DLF Ltd., a large developer based in India, to build out the 11.5-acre site. The joint venture then hired New York City-based Robert A.M. Stern Architects to complete a 2.4-million-sq-ft master plan. The architect went on to design the DLF/Hines building.
With 14 of 25 floors completed, the $257-million complex is set to open in the fourth quarter of next year. Targeting for a LEED Gold rating, the building features a double-glazed, unitized curtain wall, energy-efficient air systems, gray-water recycling, underground parking and a landscaped plaza that greets the rest of the site, which DLF has earmarked for a second office tower and luxury shopping mall. In all, the site developments are expected to be worth $500 million.
Quality, Not Quantity
In developing countries, quality of construction is often called into question, and local contractors can become easy targets. Yet out of Hines' early research came the revelation that developers—not contractors—are often a project's worst enemy here.
"Most developers in India are so focused on moving a project quickly and getting a project cashed out that they don't spend the right amount of time to properly plan and design a property and give the contractors the tools, decisions and drawings in order for them to execute well," Stevens says. For One Horizon Center, Hines and DLF developed 100% construction documents before going out to bid—a strategy that helped the joint venture keep the project specifications under tight control.