Golf in Moscow begins to blossom

Golf in Moscow begins to blossom

1st September 2008

It shouldn’t surprise anyone that the first Jack Nicklaus signature course to open in Russia – Tseleevo Golf Club on the outskirts of Moscow – is a private club commissioned by an individual whom Nicklaus describes simply as a “very wealthy man.”

In the former Soviet Union, like other emerging markets, new wealth is sparking the creation of spectacular, high-end courses, either for resorts or private use. But bucking the international development trend, Russia, specifically Moscow, is pushing to build municipal courses, too.

The city’s mayor also has turned to Nicklaus Design for a vision of his own: Establishing as many as 15 public facilities, which may vary from regulation courses to par 3s to driving ranges.

“They want to do for golf in Russia what they did in tennis, and they have tennis players all over the world (who) are very successful,” Nicklaus says. “They’re gearing to their youth.”

It’s a scenario that’s vitally important for increasing participation worldwide, but disturbingly lacking, according to Andrea Sartori, a partner with the Budapest office of KPMG who oversees the consulting firm’s golf advisory practice. KPMG conducts benchmark studies analyzing course building in Europe, the Middle East and Africa.

It also hosts the Golf Business Forum, a major development conference, which itself is a testament to the current international building boom. Nearly 320 industry leaders from more than 40 countries attended the fifth annual conference, this year held in Ireland.

Regarding new courses overseas, Sartori says: “Eight or nine out of 10 will be a golf resort and/or a golf community. We are almost seeing the end of the development of standalone golf facilities. Land is too expensive, construction costs are too high and the return very hardly justifies an investment into a golf course.”

That’s a threat not only to the game but for short-sighted developers, too, Sartori says. Relying solely on tourism to fill a burgeoning supply of courses, he says, is a risky proposition. An “indigenous population of golfers” is a must.

“After Ireland, Sweden is the country in Europe with the highest participation rate,” Sartori says. “This is the effort of the creation of junior programs, the creation of affordable golf courses and the intervention of the public sector.”

The development activity in Russia was inevitable, says Paul Stringer, senior vice president of Nicklaus Design. He says the country’s natural resources, such as gas and oil, have created a new Russian upper class that has discovered elite golf facilities while traveling abroad, and now wants to introduce such amenities at home.

“They have a keen interest in the game, and secondly, there’s a belief that they could prosper as developers because it hasn’t been done in their country,” Stringer says.

According to a KPMG survey of course architects, the top markets for development in the next decade are China, Eastern Europe and Russia, United Arab Emirates and India.

Russia already is a key market for Nicklaus Design, which is witnessing an international sales spike not seen since the Asian development boom that spanned from the late 1980s to early ’90s. Besides Tseleevo, the firm has three other course projects under contract in the area, including one in St. Petersburg near Catherine the Great’s summer palace. Nicklaus Design also is in discussion for two projects in Sochi, a sprawling resort city along the Black Sea.

“Six years ago, approximately 75 to 80 percent of our business was domestic and the rest international,” Stringer says. “Now, it’s almost completely flipped.”

By:Gene Yasuda of Golfweek