For Dubai's property giants, India's vast population and rapidly growing economy are too big a lure to ignore.
Dubai to the Deccan plateau
From beside the pool of the Emaar villa the view ranges over manicured golf greens to the rugged, boulder-strewn landscape of India's Deccan Plateau and the majestic ruins of Golconda Fort, the seat of medieval sultans. "It's like Arabian Ranches - Emaar's very, very exclusive property in Dubai," gushes the public relations man showing me around the Boulder Hills site on the outskirts of Hyderabad. "If you like the architecture of their villas there, it's the same here: there's a touch of Spanish, a touch of the Mediterranean."
EmaarMGF, the Dubai developer's Indian joint venture, is investing US$1.4 billion (Dh5.1bn) in this development, set on 212 hectares centred on a golf course and sprinkled with 105 villas in three styles - Spanish, Mediterranean and Tuscan. William Rattazzi, EmaarMGF's chief executive, says the site brings Dubai's upmarket gated communities to India for the first time. "Boulder Hills is an example of state-of-the-art architecture built around the successful master-planned communities concept pioneered by Emaar in Dubai," he says.
As well as the villas, Boulder Hills has three luxurious residential tower blocks, a mall, three hotels, a multiplex cinema and an IT Park. EmaarMGF is spending $12bn in India in the next four years, developing 55 million square feet of residential projects, 18m sq ft of retail, and 30,000 hotel rooms. It is not alone. India, with its vast population and fast-growing economy just across the Arabian Sea, is proving too big a lure for Dubai's property giants to ignore.
Limitless, the international property business of Dubai World, has teamed up with India's DLF to build the $12bn Bidadi township, a new city for 750,000 people, that is every bit as ambitious as its development in Jebel Ali. Other groups, such as Bahrain's Gulf Finance House, Tanmiyat, Al Futtaim, and RAK Investment Authority, all have Dubai-inspired Indian projects planned. India's own property companies also dream of emulating the Emirates.
Lanco, a Hyderabad-based construction giant, and Reliance Infrastructure both plan 100-floor skyscrapers near Boulder Hills. Lanco's 100-floor Signature Tower, at its Lanco Hills development, will be India's tallest residential building. Reliance's Central Business District and Trade Towers will be the tallest skyscraper in India. "If you see the mindset of the construction guys in India, all of them would like to eventually copy Dubai," says Suresh Kumar, the finance director of Lanco. "The way we see Lanco Hills, it's nothing but an extension of what's happened in Dubai."
Mr Kumar sees this as a result of India's close cultural links to the Gulf, and to the predominance of India's workers in the Gulf construction industry. Even the building techniques are the same, based around roller-compacted concrete, unlike South East Asia, which favours pre-fabricated slabs. But not everyone believes that the Emirate's incredible development story can be replicated so easily.
"Most of the bigger cities have restrictive land prices," says Mridul Upreti, at the Mumbai office of Jones Lang Lasalle, the global property management and investment firm. "Land prices are going to make it extremely difficult to buy these 100-acre tracts of land." "Infrastructure is tough," Mr Upreti said. "Most of the Middle East investors would find it difficult to develop in areas where there's no infrastructure available."
He added that suitable sites with the necessary infrastructure are few and far between. At Boulder Hills, landmarks that do not appear in the brochures are what makes the project possible. Over the fence from the Club House is the bulbous office building of Wipro, the Indian IT and outsourcing giant. On the ridge at the other side of the golf course sits the Swiss bank UBS. Next to that is the Indian School of Business and, to the right, a huge Microsoft campus. Infosys is building a new centre next door.
Boulder Hills is in the middle of Hitec City, the centre of Hyderabad's IT industry, which is growing at 40 per cent a year and generated about $6bn-worth of export revenue last year. "Hyderabad is a key driver of the country's economy, having transformed itself into an IT hotbed," says Mr Rattazzi. EmaarMGF has already sold all 105 villas at Boulder Hills and 60 per cent of the apartments. But infrastructure is nonetheless an issue. It can take one and a half hours to get to the centre of Hyderabad from Hitec city.
But Mr Kumar says this does not bother the buyers at Lanco Hills. "Most are non-resident Indians who are coming back to settle in India," he says. "They want to live in similar living conditions to what they are used to in the US. They would prefer not to be in the city with all that hustle-bustle." There are questions about how many Indians can afford Dubai-like levels of luxury. Venkatesh Rao, a private equity investor who has just bought one of the Boulder Hills apartments, thinks Hitec City will become a new Silicon Valley, creating a growing market for luxury.
But the flats, at $350,000 for a one-bedroom unit, are going at between one-and-a-half and twice the standard Hyderabad rates. "There are probably between 50 and 100 people in Hyderabad who can afford that," he says. The rocky Deccan plateau provides another key reason why Hyderabad is one of the few cities in India that could conceivably become like a new Dubai. "You can find huge tracts of land here that have never been lived in by anyone," says Mr Kumar. "Dubai is sea, converted into sand, converted into high-rise. Here is it rocky terrain converted into high-rise."
And the city's government has high-rise development at the heart of its vision. No building in the district around Reliance's 100-story tower will be less than 30 storeys high, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) has dictated. "It will be the Wall Street of Hyderabad," says Partha Saradhi Rao, the chief engineer of APIIC. This high rise-friendly approach contrasts with Mumbai's draconian Floor Space Index (FSI) norms, which outlaw tall buildings from most of the city, keeping it cramped and overcrowded.
"In Mumbai, nothing is possible," Mr Kumar complains. While Mumbai could be the worst example of a city with bureaucratic, obstructive and corrupt urban planning authorities, such cases are far from rare in India. When the opportunity is large enough, this has not necessarily put Gulf companies off. Limitless is involved in one of India's most sensitive projects, bidding for one of the five redevelopment projects for Dharavi in Mumbai, Asia's largest slum.
But even in relatively enlightened Hyderabad, negotiating the bureaucracy, politics and vested business interests is more difficult than it would be in Dubai. Lanco is struggling to get permission for its Signature Tower from the Civil Aviation Department of India. And Emaar is still waiting to get final approvals for the villas at Boulder Hills, more than three years after launching the project.
In 2006 and last year, Janardhan Reddy, a prominent politician from the ruling Congress Party, waged a noisy campaign against Boulder Hills, demanding greater compensation to the farmers and calling for the property to be stripped from Emaar. However, Mr Reddy died of a heart attack at the end of last year and the campaign has lost momentum. EmaarMGF now says, "we have all master plan approvals necessary for undertaking construction activities currently under way for the project".
But Mr Venkatesh Rao says there are still steps that the developer needs to take. "They have not approached us so far on the villas," he said. "Officially the building plans have not been submitted to us for approval." However, permission could be granted as early as next month's APIIC board meeting, he says. Even so, Emaar has taken a hit. It took money up front from the villa's prospective buyers a few years ago. "A lot of my friends gave money and of course they are angry," says Mr Rao. "It will dent Emaar's reputation."
As they grow in India, the Gulf's property companies will become used to such local political issues. And Mr Rao, for one, believes that they will not prevent Hyderabad - with a population of seven million to Dubai's 1.5 million - from one day out-doing the Gulf. "I have seen what is there in Dubai: if you travel 10km, Dubai is over," he says. "I don't think Dubai is having this much growth." @Email:firstname.lastname@example.org