Dubai's financial free zone is considering cutting rents and offering other incentives in a bid to assuage tenants who have paid among the highest rates in the world.
DIFC considers incentives for tenants
Dubai's financial free zone is considering cutting rents and offering other incentives in a bid to assuage tenants who have paid among the highest rates in the world. Abdulla Mohammed al Awar, the chief executive of the Dubai International Financial Centre (DIFC) Authority, said the DIFC was now focused on its role as a "facilitator" of "business clusters", not the large investments that defined the company during the boom years.
"When the crisis hit, we re-evaluated our offerings," Mr al Awar said. "We realised there was a need to look at the regulations and reduce the cost of business for our clients." The news of a possible rent revaluation comes after DIFC Investments, which owns the property and infrastructure of the DIFC, reported large losses on write-downs of the value of its property and investments. The DIFC would not institute a blanket cost cut for businesses in the centre but would move towards incentivising different industries and focus on clients who wanted to increase the amount of space they rented.
The DIFC will lend its expertise to up-and-coming financial centres such as Sowwah Island, the new central business district in Abu Dhabi. "We have gone through a lot of the hiccups with starting up a financial centre," said Marwan Lutfi, the deputy chief executive of the DIFC Authority and head of business development. "We owe it to the UAE to make sure we share our experience." The DIFC was founded in 2004 with the aim of creating a free zone to stimulate the non-oil economy and develop a world-class financial hub serving the region, but it began to make large-scale investments on its own with debt - including a US$1.8 billion (Dh6.61bn) investment in Deutsche Bank and acquisitions of financial services companies. Many of these investments soured in the aftermath of the financial crisis.