Oil wealth is transforming Azerbaijan’s capital at a rapid rate, says Mark Caswell
If you had to guess the world’s fastest-growing economy of the past few years, what would you say? Most people would probably plump for China, possibly India – maybe even Dubai before the bubble burst.
It’s unlikely many would consider the former Soviet state of Azerbaijan, with a population of less than ten million inhabitants. But between 2006 and 2008 this oil- and gas-rich country topped the GDP real-growth rate table, and was only beaten into second place in 2009 by the Middle Eastern emirate of Qatar.
To understand why, you need to go back to the early 1990s, when Azerbaijan emerged from the shadows of Russian rule following the collapse of the Soviet Union. There followed three more years of instability caused by the war with Armenia over the enclave of Nagorno-Karabakh in south-western Azerbaijan – the territory remains disputed to this day but a ceasefire was reached in 1994. After that came a 30-year agreement between the State Oil Company of Azerbaijan Republic (SOCAR) and about a dozen oil firms, including BP and Exxon, to explore the country’s deepwater oil fields.
Huge revenues from oil and gas have brought boom times to Baku, the capital and home to more than a fifth of the country’s population. Everywhere you look, cranes signal another residential or hotel development, while older buildings in the city centre have been scrubbed to within an inch of their lives to project a feeling of wealth in line with the luxury boutiques now housed inside.
The city lies at a crossroads between east and west, and ideologically, although about 95 per cent of its inhabitants are Muslim, and Azerbaijan was the Capital of Islamic Culture in 2009, the country officially remains a secular state, and only a small minority of the population attend mosques. Azerbaijan joined the Council of Europe in 2001, and the country has courted global recognition, including a bid for the 2016 Olympic Games (it was unsuccessful).
At the forefront of new Baku is Pasha Construction, a private investment consortium responsible for two forthcoming mixed-use developments – Port Baku Towers and Port Baku Residence. So called because they are to be built on the site of the city’s port, which is being rebuilt away from the centre, the Towers project will comprise 65,000 sqm of office space, restaurants and a spa and health centre, while Port Baku Residence will have 375,000 sqm of residential and retail units, complete with a gym and wellness complex, and conference space.
Ahead of this, Pasha will open two hotels in the city next year – the Four Seasons Baku, and JW Marriott Absheron Hotel and Residences. With expats flooding in to work in the oil and gas industry, Baku is crying out for international hotel brands, with only two Hyatt properties (Hyatt Regency and Park Hyatt), and a further two Rezidor hotels (Radisson Blu and Park Inn) already established here.
The 177-room Four Seasons is located next to SOCAR’s headquarters, facing the seafront promenade, and features an exterior inspired by late-19th century French architecture, reminiscent of the Four Seasons George V in Paris. Facilities will include two restaurants, an 800 sqm business centre, a 1,500 sqm ballroom, and 1,600 sqm of spa and fitness space. The 20-storey JW Marriott Absheron will overlook Freedom Square and will feature 228 rooms, a 1,000 sqm ballroom, 16 levels of private residences and apartments, and office and retail space.
In addition, Pasha is developing the 152-room Amburan Marriott Beach Resort on the shores of the Caspian Sea just outside the capital, with tennis courts, indoor and outdoor pools, a bowling alley and 300 metres of private beach.
Not content with housing the city’s influx of new visitors, Pasha also wants to keep them entertained. It has recently opened Chinar, a trendy glass-fronted restaurant cum nightclub over two floors, with pan-Asian dining overseen by a team formerly of London’s Hakkasan. It has a VIP lounge and a teahouse with an outdoor terrace and bamboo grove. It’s the sort of place that would have been unthinkable under Soviet rule, and if the packed launch party was anything to go by – attended by members of the president’s family and an array of wealthy Azeris – it’s a sign of things to come.
Next year, Hilton and Fairmont are also due to boost the number of branded hotels in the city. Hilton’s first property in Azerbaijan is expected to open next autumn, and will feature 300 rooms, an indoor pool, a health club, two restaurants, and “extensive conference and meeting facilities”. The 347-room Fairmont Baku will form part of the futuristic three-pronged Flame Towers project, which will also include residential and commercial space. It will be located next to the city’s parliament buildings overlooking the Caspian Sea.
Initially, at least, these hotels will fulfil the growing market for business travel. The city’s tourism industry is in its infancy, and at more than £800 for a return economy flight with Bmi, it’s unlikely many from the UK will be visiting Baku for a weekend getaway any time soon. Still, Javad Marandi, managing partner of Pasha Construction, believes much has been done to make Azerbaijan attractive to international tourists.
“Over the past five years, substantial measures have been taken to improve our offering to tourists. These include the creation of eight national parks, improved infrastructure into the regions and a legislative focus on developing our tourism industry,” he says.
Work is also being done to restore the old walled inner city of Ichari Shahar, which is worth a visit if you have some spare time. A UNESCO World Heritage site, its attractions include the 12th-century Maiden Tower and Shirvanshah’s Palace. In 2008, a masterplan was drawn up for the restoration or conservation of every cobbled road and historic building in the district, right down to the underground infrastructure and street lighting. As a result, much of this area is under wraps at the moment as the works continue.
The city is also wooing tourists with the forthcoming Heydar Aliyev Cultural Centre, which will house a museum, library, landscaped gardens and 21,000 sqm of conference space. The complex is being designed by British Iraqi architect Zaha Hadid, who was responsible for projects including the forthcoming Dongdaemun Design Park and Plaza in Seoul, and who played an important role in Azerbaijan’s Olympics bid.
While Baku is no Dubai in terms of record-breaking buildings and huge reclamation projects, it is aiming to put itself on the map with a number of interesting construction projects. A circular walkway is being built on the shores of the Caspian that will stretch 30km from the Ahmadli area of the city to the location of what will be the world’s largest flag. At 2,625 sqm, the size of about four tennis courts, it will fly from a 160-metre high pole.
Marandi says: “The pace of change, growth and internationalisation in Baku is astonishing to people who don’t know our city. But as one of the world’s fastest-growing economies for several years, we are more than used to this pace of change. What would a few years ago have seemed an impossible step now seems like business as usual. Baku is ready.”
Getting there
Bmi (flybmi.com) flies daily from London Heathrow to Baku, and Azerbaijan Airlines (azal.az) offers a three-times weekly service between the two capitals.
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