A surge in commodities trading business in the UAE has helped the Dubai Multi Commodities Centre to finally overtake Jebel Ali and RAK Free Trade Zone as the country's biggest free zone.
A surge in commodities trading has helped the Dubai Multi Commodities Centre (DMCC) to overtake Jebel Ali Free Zone and RAK Free Trade Zone as the country’s biggest free zone.
The DMCC, which oversees businesses registered to operate in the 65 blocks of offices and flats in Jumeirah Lakes Towers (JLT),has been signing up an average of 200 new companies each month since the start of last year, making it the fastest-growing free zone in the country.
Yesterday DMCC said the number of companies currently active and registered to the free zone had reached 7,330, buoyed by increased interest from South Asian firms.
The figures place the DMCC ahead of the industrial specialist Jebel Ali Free Zone which, according to its website, is home to 6,400 companies, and ahead of RAK Free Trade Zone (which boasts 7,000 clients) in Ras Al Khaimah.
The free zone, one of 36 trade areas in the UAE that allows firms to operate with full foreign ownership for a guaranteed period of time, specialises in the trade of gold, diamonds, tea, pearls and commodities futures contracts.
Trade in gold and other precious metals has enjoyed a steep rise in business since the start of the economic downturn in 2008 as investors seek safe havens for their cash. The DMCC has been quick to exploit its geographic position to cash in on the growing popularity of precious metals and commodities trading.
Dubai’s gold trade has surged from US$6 billion in 2003 to $56bn in 2011, according to DMCC data. Similarly, the gemstone trade in the city has increased from $5 million in 2003 to more than $39bn in 2011. The DMCC said the number of free zone customers had increased by 38 per cent since summer last year, when 5,300 companies were registered. It is aiming for 10,000 registered members by 2015. About 95 per cent of the companies that signed up this year were new to Dubai and a third were from South Asia.
“We are now the UAE’s largest and fastest-growing free zone and remain committed to further growth in order to cement Dubai as the global hub for commodities trade and enterprise,” said Ahmed bin Sulayem, DMCC’s executive chairman.
“Currently, we are concentrating on serving markets along the new Silk Road and have become a strong facilitator of trade for producing countries in Africa and consuming nations in Asia, Asean [the Association of South East Asian Nations], Europe, South America and the US,” he said.
Like many parts of Dubai, JLT was hit hard by the global financial crisis, with many offices in the high-rise scheme close to Dubai Marina left unoccupied. According to CBRE, between 45 and 47 per cent of office space in Dubai is empty.
However, the DMCC said 74 per cent of the 2.9 million square metres of completed offices in the estate was currently leased and the estate was expected to approach full capacity by 2015.
It said the increase in demand meant that it was pressing ahead with plans announced this year to build another 743,224 sq metres of office space in the JLT area, including an office tower that is at least 520 metres high, making it the world’s tallest office block.