DIFC to double in size in a decade: Governor

Dubai International Financial Centre (DIFC) is on track to double in size over the next decade with companies from China and South-east Asia set to fuel its next phase of growth, the governor of the financial free zone said on Monday.

The zone's expansion illustrates the shift away from traditional financial centres such as London and New York due to the increasing wealth of emerging market economies, and the increasing importance of the Middle East as a hub.

DIFC has its own labour laws and court system separate from the wider UAE. Since opening a decade ago, it has risen to become the most prominent financial hub in the Middle East, with many international banks, law and advisory firms and insurance companies using it as their regional base of operations.

"We've been growing very fast, in terms of the number of companies and people that are working in the DIFC, and if you extrapolate that, we'll manage to double everything in the next 10 years," DIFC Governor Essa Kazim told reporters at a media event.

"Chinese and South-east Asian companies are showing a strong interest in the region so we are working with them to capitalise on Dubai and the DIFC as a hub for their businesses to expand. That is where I feel the growth will happen."

The doubling in size would be in terms of floor space, the number of people working in the centre and the number of companies there, Kazim added.

In total, around 17,000 people worked in 1,147 companies based in the area at the end of August, according to figures provided by the centre.

The DIFC currently has around 15.2 million square feet of office and other space, such as retail and hotels, and plans to add an extra 10.2 million square feet have already been announced.

The DIFC has strongly supported Dubai's vision to broaden its economy over the last ten years, with the financial sector's contribution to GDP rising from 5.5 per cent in 2004 to more than 12 per cent today.

Kazim said: "Not only has the DIFC supported the growth of Dubai and the wider region, but we have also helped many of the world's leading financial institutions realise their own ambitions for the region. Despite the challenges the world has faced over the last decade, in particular in the financial sector, DIFC and Dubai have demonstrated their resilience, and their ability to grow through global turmoil. This gives us the confidence to embrace an even more ambitious vision for the next ten years and beyond, as we seek to establish ourselves as equals to the world's great financial hubs."

By 2018 the DIFC aims to have 1,700 firms and 20,000 employees, the financial centre said.

With DIFC owned office space at 100 per cent capacity, and the Centre set to grow further, a fourth business centre is currently under development in Gate Village Two, adding 11,000 sqft of office space to accommodate new clients.

Dubai's strategic location, connected to many of the world's fastest growing economies allows the DIFC to facilitate the major shift in capital flows from developed to emerging markets.

Having successfully fulfilled its original aim of attracting US and European companies to the Centre, the DIFC continues to grow and innovate, targeting new geographies in order to meet the demands of its ever expanding and diverse client base. China and Africa will become primary targets for example, with the DIFC investing heavily to better serve these critical emerging economies.

DIFC Investments, the investment arm of the free zone, raised $700 million from a 10-year sukuk earlier this month that will help to fund its real estate development as well as pay off existing debt.

There were no plans to sell further Islamic bonds at the present time, Chief Financial Officer Rajesh Pareek told the event, saying the money that was raised from the sukuk was sufficient for its needs.  

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