India and China both represent huge opportunities for golf development. But it’s a mistake to assume that the two markets are inherently similar, says Kevin Ramsey.
The temptation to compare the Indian and Chinese golf course development markets is, like the potential for each market, huge. But having worked extensively in both locales, I don’t see too many similarities.
The Chinese market isn’t just further along, but the motivations behind development in China and India diverge starkly.
We’re busy in India: Golfplan designs are currently under construction at Champion Reef and Indus Golf Club in Bangalore, and have projects under contract in Mumbai, Hyderabad and Chennai, where the first of two, Sriperumbudur, is under construction.
As has been the case with most of golf’s emerging markets over the last 20 years, we were there at the outset (Golfplan founder Ron Fream did renovation work at Delhi GC and Royal Calcutta in the 1980s). Likewise in China where we’ve designed eight courses. The first opened in 1981, the most recent last year (Qiandaohu CC in Hangzhou).
In China, golf development is all about land speculation. The government still owns the land and makes it available via 60-80 year leases. Developers can acquire land in huge swathes – often thousands of acres. Golf and associated real estate development are two ways of putting that land to use.
The Chinese government is beginning to do more large scale, regional land-use planning, but many courses have been, and continue to be, built without much due diligence. So long as jobs and a tax base are created, land can be leased long term on the cheap. The government owns the banking apparatus, too, so if it says “Make loans available for this project,” the bank complies.
Indian developers are far more cautious and conservative in their approach, mainly because land acquisition is much more expensive and time-consuming. In most cases, the government doesn’t own or have control of the land, nor can it move people off that land. Accordingly, course developers must negotiate with dozens of private owners to piece together a parcel big enough to accommodate golf. As soon as others find out a developer is accumulating land, the price goes up. This breeds caution. I have never seen a speculative land deal in India, and I’m not holding my breath.
Having spent that sort of time and money, it follows that Indian developers HAVE done a great deal of due diligence. They recognise that golf is coming, that rising affluence, a growing middle class and swollen expat communities in India have created a market – and they are more discerning about where these projects take shape.
One of Golfplan’s projects in Chennai, Sriperumbudur, illustrates several of these dynamics. Chennai is the only deep-water port on India’s east coast. Special Economic Zones (SEZs) have been created here, fuelling huge growth in manufacturing, shipping and warehousing. This activity has also resulted in a growing expatriate influence.
In and around these SEZs, the government does control large tracts of land. In distributing/selling parcels to manufacturing companies, there is also the obligation to create housing and recreational options to serve what are essentially new cities and towns.
Sriperumbudur’s parcel was secured in this way. It is located slightly west of Chennai near what is going to be a new airport. Golfplan has designed a 7,100 yard course on about 170 acres. The course will be fully integrated with a five star hotel with a single-family housing component and serviced apartments as part of the clubhouse, allowing the hotel component to shrink or swell as needed. Sriperumbudur will also feature a golf academy – something we feel is important here. With so many expats, many members will be experienced golfers, and the course must be exciting enough to attract and keep them.
There are, however, serious issues to confront. First, there is a myth among Indian developers that championship golf courses can be built on 100-120 acres. International-standard courses cannot be safely designed on 110 acres and, ultimately, it’s bad business. Overly cramped golf/real estate products don’t attract members and homebuyers.
Water is another overarching issue. Because so many Indians still depend on local lakes and rainfall for drinking water, irrigation, along with the choice and allocation of turfgrass, takes on primary importance. The entire project scope (from sale of infrastructure to the number of real estate units to irrigation) is affected, and it’s as much a political as a practical development matter.
With larger developments, we have insisted on inclusion of water treatment facilities that can recharge irrigation lakes at no deficit to the community. At Sriperumbudur, we were fortunate to have a client who felt as we did. We’ve designed a closed system where and all the water used on site is drained/channelled back to lakes (because retention capability is vital during the dry season).
We are fortunate because our client in Chennai – Hyderabad-based IVR Prime, led by Sunil Reddy – is extremely pro-environment. The vertical architecture relies heavily on solar power and open-air circulation. They respect the land and people, so our water treatment and drainage scheme was enthusiastically supported. This is another contrast between India and China. We have worked for environmentally and socially conscious developers in China, but they are often the exception.
India, unlike China, does have history with golf: Royal Calcutta is the oldest club outside Britain. The Indian army has long owned and operated courses, though there aren’t many and they are of notoriously poor quality. The success of projects under construction will play a key role in convincing the military, and other potential developers who control land, that golf is a venture worth undertaking.
Kevin Ramsey is vice-president in the architectural firm Golfplan. Founded by Ron Fream in 1972, the firm has designed courses in more than 60 countries.
This article was initially featured in the April 2010 issue of Golf Course Architecture.