Benoy among a handful of UK companies at the reopening of the British embassy in Tehran
The retail specialist joined foreign secretary Philip Hammond on the first major British trade mission to Iran since the country agreed to curb its nuclear programme in July.
Hammond’s tour included a ceremonial reopening of the UK embassy which RIBA vice president international Peter Oborn welcomed as ‘an important milestone in international relations’.
Businesses worldwide are predicting a surge in new work following the landmark deal last month between the UN Security Council and Iran which will curb its nuclear programme in return for the lifting of trade barriers.
Commenting on the thawing of relations, Oborn said: ‘The RIBA is exploring the opportunity this provides to engage with its professional counterparts.’
‘Members thinking about working in Iran will be aware, however, that trade sanctions remain in force and should take appropriate advice.’
He also warned the ‘current turmoil in global markets’ – which saw billions wiped off global financial markets amid fears of a Chinese downturn this morning (24 August) – ‘is a reminder for members to manage their commercial exposure, wherever they may be working.’
Practitioners with experience in Iran nevertheless believe large architecture, design and construction firms will flock to the country when trade restrictions are lifted – as expected – later this year.
Mehran Gharleghi of London-based Studio Integrate said: ‘Without a doubt the doors of a massive economy are about to open.
‘Iran’s construction scene is quite active [and] there are a lot of buildings and infrastructural projects constantly being built. There is a huge desire to work with international firms especially within private sector.’
Gharleghi welcomed the end of trade restrictions which previously forced his firm and other high-profile UK-based outfits to turn down large-scale schemes: ‘This is all about to change and indeed we are in a super exciting times.’
Paul Stallan of Glasgow-based Stallan Brand – which has masterplanned a university of Oil and Gas for neighbouring Iraq – was similarly optimistic.
He said: ‘Without doubt Iran presents an opportunity for what is an astonishing place, a place that is sure to become more accessible with the prospect of sanctions being lifted.’
He added: ‘Interestingly Hassan Rouhani the president of Iran has a fondness for Glasgow having studied law as a post-graduate student at Glasgow Caledonian University. Perhaps a twinning of Glasgow and Tehran is possible.’
Omid Kamvari of London-based Kamvari Architects – which recently won a contest for a new mixed-use development in Tehran – agreed breaking into the market would be challenging for UK firms.
He said the country’s massive architectural workforce could restrict opportunities. ‘There are 250,000 architecture students and 850 universities offering architecture courses which means there is a lot of local architects.’
Low fees also meant it would be difficult for international firms to compete, he predicted. He said: ‘We regularly fail to win work in Iran due to this as it becomes a question of quality of services provided which is lost on the majority of investors.
‘Low overheads in Iran, cheap labour and different view towards quality and quantity of information produced makes it difficult for a international firm to operate.’
He added: ‘The majority of developments are completed by individual investors which means they will be difficult to gain access to and they are not professionals in terms of dealing with consultants.’
Kamvari was however optimistic that given the right conditions international firms may prosper in the country.
He said: ‘What we are keen on seeing is foreign investment into a booming housing market, with a deficit of close to 500,000 annually and returns of between 30-50 per cent.’
He continued: ‘This could be a very rewarding market for international funds and developers to invest in and it is at this stage that foreign firms would be able to secure work in Iran and hopefully we will be able to play a bigger role.’
Extensive local research is crucial to winning work in the country according to Gharleghi. ‘As the doors have been closed for such a long time, rules, fees, design stages of architectural projects and even details of doing business in general, are quite different to the way it’s done here in the UK and many other countries in the world.’
He continued: ‘To increase the chance of winning a project the best way is to work with an expert or a consultant from very early stages of negotiation and feasibility studies in order to navigate through the local know-how. Otherwise the chance of winning a project is quite slim.
‘This is normally the result of a cultural gap and mutual misunderstandings despite of the genuine interest of establishing international collaborations.’
The deal has already been approved by the European Union but must pass a challenging vote in the US Congress on 17 September before sanctions are fully lifted.