x Abu Dhabi, UAEFriday 21 July 2017

Global Marketplace Abu Dhabi aims to fill world trading niche

Two private institutions played key roles in helping the Abu Dhabi government with the planning of the new financial freezone.

Al Maryah Island is the focal point for the capital's financial services industry, and the free zone reinforces this position. Ravindranath K / The National
Al Maryah Island is the focal point for the capital's financial services industry, and the free zone reinforces this position. Ravindranath K / The National

Two private institutions played key roles in helping the Abu Dhabi Government with the planning of the new financial free zone, the Global Marketplace Abu Dhabi.

The UAE investment bank ADS Securities advised on technical aspects of financial markets, while the law firm Allen & Overy helped draw up the legal framework for the new financial centre, which is expected to become operational by the end of the year.

ADS, headed by the chairman and major shareholder, Mahmood Ebraheem Al Mahmood, is believed to have helped the authorities develop one of the key features of the new centre — the potential to service investors in global securities during the so-called "black zone" when most Asian, European and American markets are closed.

"There is a need to establish a tradable market in these periods to reduce the risk to the big investment banks and other investors and lower the vulnerability of international trading," said a person familiar with the project.

It is unclear what role ADS will provide for the new free zone, but some observers expect Mr Al Mahmood to feature as a senior executive on the board of the authority that will soon be established by the Government. Mr Al Mahmood and ADS declined to comment.

Khalid Garousha, an Abu Dhabi partner of A&O, said: "We are not able to discuss our role until the relevant laws regarding the free zone are passed. We have been involved but we're under client confidentiality."

The Abu Dhabi Executive Council last week published guidelines for the zone, comprising an executive authority, its own independent court system and an independent regulator.

Property experts meanwhile are weighing up the implications for the real estate sector for the project on Al Maryah Island.

"It is too early to really say exactly what effect the new free zone will have," said Matthew Dadd, an associate director of the property consultancy Knight Frank in Abu Dhabi. "We do expect that the new rules will prove positive for any occupiers wanting to come to the UAE as well as existing occupiers who stand to benefit from the new structure. This means that we will definitely see people looking to relocate there.

"However, the quantum of space they will be vacating in Abu Dhabi is unlikely to be very great. The free zone was established for financial companies that currently do not occupy a huge amount of space in Abu Dhabi. Moreover most tenants have signed three to five-year leases and so they are unlikely to move overnight."

David Dudley, the head of the Abu Dhabi office of Jones Lang LaSalle, said: "Al Maryah Island remains the focal point for Abu Dhabi's new commercial and business district, and the recent free-zone announcements certainly cement this position. As the legal regime of the free zone becomes established and the island develops critical mass, this will lead to many occupiers leaving their current locations and moving to Al Maryah.

"More importantly, though, the free-zone status will attract new levels of demand to [the emirate], which will be highly positive for the office market overall," he added.

Accenture, the global management consultancy, yesterday announced it had moved its regional headquarters to Al Maryah Island from a different location in Abu Dhabi.

 

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