The DIFC unveiled its operating review for 2013, which showed a 14 per cent jump in the number of companies operating with the centre.
Rich pickings worth US$8 trillion across the region for UAE bourses
UAE financial markets have the chance to exploit a US$8 trillion regional economy, the head of the Dubai International Financial Centre (DIFC) said as he unveiled record figures for Dubai’s business hub.
“The question is not whether there is room for two financial hubs in the UAE,” said Essa Kazim, governor and chairman of the authority that runs the DIFC. “It should be: what opportunities exist to serve two hubs. The UAE is at the centre of a regional economy, the Middle East, Africa and south Asia, that is expanding fast.” He put the combined GDP of those regions at $8tn.
The DIFC unveiled its operating review for 2013, which showed a 14 per cent jump in the number of companies operating with the centre, to 1,039, and an 11 per cent increase in the number of employees working there, to 15,600.
The Abu Dhabi Government has announced plans to set up a financial free zone in the capital, the Abu Dhabi Global Market (ADGM), which should reach “critical mass” later this year.
“Look at Europe,” said Mr Kazim. “There are lots of financial centres, all of them successful. It is not a question of competition. Our economic history shows we are true believers in free markets.
“It is not a question of competition. We are open to collaboration. It is really the development of the UAE we are talking about, not just Dubai,” he added.
Jeff Singer, chief executive of the DIFC Authority, said: “The growth that DIFC has experienced in 2013 has been the highest achieved since the beginning of the great financial crisis. We have created one of the best working environments in the world, attracting talent from across the globe.”
He added: “Dubai is a great financial hub, not a centre for suitcase banking,” and promised measures to make the DIFC more competitive and cost-effective in comparison with its regional and global rivals.
“Suitcase banking” is a pejorative phrase used in the financial industry for bankers and advisers who travel from their headquarters, usually in he US or Europe, to do business in regional markets.
“We want to expand not just the size of our membership, but also their physical presence here, the level of their activities and the quality of those firms,” he said.
Mr Singer said that one specific measure under consideration to attract firms to the DIFC was a plan for a “technology transit zone” where members doing business in the centre would be given reduced rates for telecoms and data transmission. “We want to bring costs down significantly compared to other jurisdictions.” he added.
Brett Schafer, chief executive of the DIFC property business, said that the centre had the physical capacity to double in size over the next five years. Tenancy levels in DIFC-owned commercial and retail space was at 99 per cent occupancy, he said, and at 97 per cent in space owned by third parties but managed by DIFC.
To meet the growing demand, space has been made available in buildings not owned by DIFC but within the free zone precincts, like the recently opened Daman offices, Index Tower, Park Towers and Emirates Financial Towers. “We have got the capacity to accommodate another 15,000,” Mr Schafer said.
Mr Singer said there were several “soft infrastructure” developments in 2013, such as the introduction of framework for institutions to develop Sharia-compliant products and services, in line with Dubai’s aim of becoming the global capital of the Islamic economy in the next three years.
“In 2014, we will concentrate on the development of new markets such as Islamic finance, capital markets, family businesses and growth markets such as Africa,” he added, singling out asset management as a potential growth area for Dubai.
The biggest proportion of DIFC firms still comes from Europe, at 34 per cent, followed by Middle East-based firms on 29 per cent, 15 per cent from North America and 12 per cent from Asia.
“Dubai is the location of choice for 22 of the world’s top 30 banks,” Mr Singer added.