The DIFC appears to have regained its confidence, no longer jokingly referred to as the Dubai International Food Court.
DIFC, the chastened heart of financial Dubai finds its footing, and swagger
Today, DIFC appears to have regained its confidence. With the naming of a permanent head of its property arm expected soon and a new focus on smaller enterprises and sukuk, the centre is primed to assert itself as both a property institution and a markets hub for the region.
At the height of the financial crisis in 2009, when it seemed the only professional activity in the Dubai International Financial Centre was the coming and going of disgruntled creditors and corporate restructurers, critics of the DIFC labelled it the "Dubai International Food Courts".
Far from being the financial hub of the Arabian Gulf, it seemed the DIFC was a centre for fast-food restaurants and coffee shops, rather than the armies of deal-doing investment bankers imagined for the centre.
Times have changed, though, and these days the DIFC is abuzz with activity again, both in the expensive offices and the food court. The retail outlets are still doing brisk trade, but they are serving a new and growing population of financial professionals drawn to the nearly 50-hectare site in the centre of Dubai.
In many respects, the DIFC already is the heart of financial Dubai, the preferred location for financiers, investors, lawyers, accountants and a host of other ancillary service providers to work, and in some cases live.
The emphasis may have changed slightly: these days the talk is more likely to be of sukuk and small-to-medium enterprises (SMEs) rather than initial public offerings and mergers and acquisitions. But the buzz is back nonetheless.
As an institution, the DIFC also seems to have regained its old swagger. It has taken a few months to achieve, but it is on the verge of completing a reorganisation, set in motion last summer, that will have long-term consequences for the way the Gulf's premier financial market operates in its second decade.
Some time soon, the DIFC authorities will appoint a permanent head of its property development business. Nabil Ramadhan has been acting chief executive since last July but, if the noises coming from the Gate district are accurate, the new boss will be an external appointment, an executive with extensive experience in international property management.
The appointment will institutionalise a state of affairs that has existed ever since the DIFC began operations in 2004, but which at times has caused confusion and misunderstanding of the DIFC: is it primarily a financial market, or is it a property business?
The new appointment will confirm that it is both - simultaneously and synergetically - just like the other big global financial hubs. Hong Kong, Singapore, London and New York are the prime financial markets in their geographical and time-zone region, but they are also the centre of a thriving metropolitan culture that commands premium prices on the property market.
As a property play, there has seldom been any doubt about the success of the project. Designed and built in Dubai's boom days, "it is arguably the most successful real estate project in the UAE", says Robin Pugh, the head of agency sales in the Middle East for Jones Lang LaSalle, the global property consultancy.
The figures seem to bear out that claim. The DIFC has increased the number of tenants each year since 2004, and at the end of last year there were 912 companies registered within its precincts, a 7 per cent increase over 2011. The overall number of employees was more than 14,000, up 16 per cent on the previous year.
The demand has changed, with a slow tilt towards tenants from Asia, the Middle East and Africa compensating for downsizing by some westerners. But according to the DIFC strategy office, still about half of the tenants are from Europe and the United States, about 12 per cent are from Asia and the balance are from the Middle East and North Africa region and the rest of the world.
In the complex, the DIFC-owned buildings - the Gate, its precinct and the Gate Village - have for the past few years never been less than 90 per cent to 95 per cent occupied. The outlying sites - such as Currency Tower, Liberty House and Index Tower, which are owned by third parties - are rapidly filling up.
To some degree, Mr Pugh explains, the success reflects an enlightened policy towards rents adopted after many clients complained that they were too high following the financial crisis. From about 2010, rents have been governed by a "matrix" that puts a cap on increases for a set number of years, which has proved attractive to tenants.
The lure of Emaar Square and the expanding Downtown district is there, but any rental advantage is not enough to outweigh the attractions of a DIFC free-zone licence, Mr Pugh says.
Although the DIFC does not publish aggregate revenue and profit figures, it is undoubtedly generating cash for the wider economy of Dubai. In 2011, according to a study by the former DIFC chief economist Nasser Saidi, the economic output of DIFC entities amounted to more than US$3 billion (Dh11.01bn), 7 per cent ahead of the previous year, which was faster than Dubai's own economic growth.
A study by McKinsey, the management consultants, estimated that for every dollar spent in the DIFC, a further $17 went into the emirate's economy via hotels, restaurants, retail and other support services.
So as a property and economic enterprise, the DIFC has been a clear success. But how has it fared in the parallel ambition of becoming a world-class financial market, a hub for the region, filling the space between Singapore and London?
"Dubai is now ranked as the top financial centre in the Middle East, Africa and South Asia, and is placed as one of the top five global financial centres where international firms want to open offices," says Jeff Singer, the chief executive of the DIFC Authority, citing the Global Financial Services Centres Index of last September.
But he recognises there is work to be done to consolidate that position in the face of rising competition from Qatar and, potentially, Saudi Arabia.
Last year he advocated a "big bang" radical overhaul for UAE markets to counter low liquidity and trading levels, and institutional changes to make the capital markets more attractive to international investors, stopping just short of calling for consolidation of the three UAE exchanges - Nasdaq Dubai, the Dubai Financial Market and the Abu Dhabi Securities Exchange.
Now he says: "I still believe the big bang idea is relevant - we've got to have a stronger market here to make the UAE a true hub where equity and debt are traded in decent volumes."
In fact, the DIFC and other Dubai financial authorities have come up with their own solution, though not necessarily in the same direction that Mr Singer foresaw.
Two recent initiatives have reoriented the DIFC, and seem to be sketching out the strategy for the financial market for the immediate future.
Under the chief executive Hamed Ali, Nasdaq Dubai, which has largely failed to pull in the big international IPOs for which it was originally intended, has launched an initiative to attract SME listings. Mr Ali is also considering a platform for trade in Sharia-compliant instruments, in line with the Dubai Government's ambition to become a global market for the listing and trading of sukuk.
Both initiatives could breathe fresh life into DIFC's position as a financial market, revive trading on the Nasdaq Dubai and compensate for the absence of IPO and M&A activity.
"These are all attempts by Nasdaq Dubai to find a niche. Will it succeed or not?That is the question," says Mohammed Ali Yassin, the managing director of National Bank of Abu Dhabi's brokerage arm.
The Gate Village, meanwhile, appears to have found its own niche as an enticing blend of fine art and fine dining, both favourite pastimes of the kind of free-spending investment banker the DIFC regards as its core clientele.
Even back in the food court there appears to be a new pragmatism. The luxury shops are still there, selling bespoke suits, handmade shoes and antique watches. But these days you are just as likely to find a gym, or a launderer, or a newspaper vendor.
"There's now a tobacconist where there used to be a branch of De Beers. That tells you a lot about where DIFC is going, " says Mr Pugh.