DIFC continues to attract companies despite market conditions
In spite of the regional unrest and the continued global economic downturn, DIFC continues to grow as one of world’s top international financial centres. As of 31st June 2011, 813 active registered companies have a presence in DIFC (2010: 792), with 312 regulated and 409 non-regulated companies, and 92 retailers (2010: 313 regulated, 396 non-regulated, and 83 retailers).
The growth in number of registered companies remained consistent in the first two quarters of 2011 at around 32 companies per quarter, which is similar to that recorded in the last three quarters of 2010.
DIFC continues to attract companies from around the world, with sustained interest from the Americas, Europe and Middle East and increased interest from Asia. Around 44% of new regulated companies joining in the first half of 2011 came from the Middle East and Asia and 50% from Europe and North America, while 6% from the rest of the world, reinforcing DIFC’s position as the business and financial gateway connecting East and West.
DIFC has also built upon its stature as the regional hub of choice for the world’s leading companies which is underlined by the geographical diversity of regulated firms operating out of the Centre with 30% from the Middle East, 10% from Asia, 41% from Europe; 16% from North America and 3% from the rest of the world. DIFC is also home to 18 of the top 25 global banks, six of the ten largest insurers, six out of the ten top law firms and eight of the top asset managers in the world.
DIFC’s strategy to build a business-friendly environment that supports the growth of its clients throughout different business cycles continues to reap its rewards. In the first half of 2011, a number of clients increased their physical presence and deployed more resources in the region. These include major multinationals who expanded their presence taking up significant additional space within the Centre, such as Standard Bank and Dubai Culture and Arts Authority.
Other firms have expanded their operations dedicated to the region including Bloomberg. Meanwhile, six companies upgraded their licences expanding the range of services they offer to their clients in the Middle East and North Africa.
Soft infrastructure development
As part of its commitment to support the growth of financial services and commercial activities in the region, DIFC continued to build on its internationally recognised regulatory framework and legal system and to strengthen its offering to clients by fostering international co-operation with counterparties, as well as creating strategic partnerships with international jurisdictions.
In H1 2011, the DIFC Authority signed new Memoranda of Understanding (MoUs) with the Chengdu Financial City Investment and Development Co, the Korea Capital Market Institute and the Dubai SME. At the same time, the other independent entity under the DIFC umbrella, the Dubai Financial Services Authority (DFSA), entered into three new MoUs. These were with the Reserve Bank of India, the UAE Insurance Authority, and DFSA Cayman Islands Counterpart.
Moreover, the DIFC Governor and DIFC senior management hosted over 86 high-level delegations in the first six months of the year including a British delegation led by Lord Mayor of the City of London with senior representatives of 20 British companies and a Chinese delegation led by the Beijing Municipality Chairwoman Ms. Wang Lijun. DIFC also hosted a US Congressional Senior Staff delegation, senior European, Nigerian and Sri Lankan delegations as well as the Chairmen and Chief Executives of some of the top international firms from different industries and sectors.
DIFC is also proud to be part of the host committee of Sibos Dubai 2013, the premier gathering of financial strategists and service providers, with a strong influence on banking trends and shaping the future of the finance industry. The event, which will take place in September 2013, will be held for the first time in the Middle East, and is testament to the UAE’s position as a global financial and business hub.
As an advocate and supporter of innovation, DIFC supported the launch of two different initiatives in H1 2011 namely the FTSE Physical Industrial Metals Index Series (PIMI) which is the world’s first investible, Shariah-compliant physical industrial metals index series, and the Dubai SME 100, the first ever ranking of Dubai’s top performing and fast growing SMEs.
Physical infrastructure development
Demand for space at DIFC continued to grow during the first half of 2011 fuelled by the appetite of existing clients for business expansion and the Centre’s attraction of new regional and international clients.
Development of DIFC’s physical infrastructure continued steadily in H1 2011 bringing the total leasable area, including third party developers, to above two million square feet of office space.
Commercial space leased by new and existing companies increased by more than 130,000 square feet in the period.
Occupancy of DIFC’s owned commercial offices in the Gate District (Gate Building, Gate Precinct and Gate Village) remains above 95% of the leasable space (total commercial office space: 1,217,259 square feet). Robust demand from new companies and existing clients increased the occupancy within third party developments (Currency Tower, Currency House and Liberty House) to 58% (2010: 44%). Total commercial office space within third party developers is 769,000 square feet.
Total DIFC owned retail space available as of end of period increased by 41,000 square feet (a growth of 22%), of which 94% is occupied (FY 2010: 71% occupancy). The retail space occupancy has remained healthy with the addition of a new range of retailers offering services that meet the needs of the DIFC community.
Client partnerships
Strengthening its partnerships with its existing clients is DIFC’s main priority and it is fully committed to supporting them to grow their businesses and providing them with a competitive environment from which they may expand. During the period, DIFC has participated in different initiatives and high-level events launched by its clients assisting them in their business and marketing efforts.
DIFC is also committed in growing the Centre’s community by attracting firms from different sectors and in turn building a complete ecosystem. In the first half of 2011, DIFC launched and completed its global business drive targeting companies from different business and financial sectors in Brazil, the US, Europe, India, China, Malaysia, and Korea.
Abdulla Mohammed Al Awar, CEO of DIFC Authority said: “In 2010, DIFC focused on developing and implementing its new business strategy which centred on growing our existing client partnerships. We have successfully carried this through into 2011 and have seen the evolution of DIFC continue, adapting to the rapidly-changing environment around us.
“The outlook for economic growth in the region continues to be strong due to the long term fundamentals, particularly its abundance of natural resources and youthful populations, as well as the benefits of economic integration through the GCC Common Market and larger Free Trade Area. DIFC, with its modern infrastructure, free zone status and self-governing laws and courts, is uniquely positioned to support this growth in the region and to continue to be a major contributor to the UAE and wider region economies.”
For further comments by Abdulla Mohammed Al Awar, CEO of DIFC Authority, on the operating review, please see this broadcast interview on the following link: http://vimeo.com/26827210
