State-run commodities major Dubai Multi Commodities Centre (DMCC) today announced its plans to build the world’s tallest commercial tower as part of its expansion plans designed specifically for large multi-nationals.
“I’m extremely proud of this project,” Ahmed Bin Sulayem, Executive Chairman of DMCC, told Emirates 24|7. The tower will be located in Dubai’s Jumeirah Lake Towers (JLT) area, Bin Sulayem told this website in an exclusive chat after the announcement.
Ahmed Bin Sulayem, Executive Chairman, DMCC
The tower, along with the planned DMCC Business Park, is part of DMCC’s expansion strategy to cater to large MNCs. “There has been space allocated in the JLT free zone area,” he said. “Take a drive down this evening and go have a look at it,” he suggested, but declined to be drawn into a discussion about the tower’s height or the number of floors.
“In today’s cut-throat competitive world, I do not wish to divulge that information today only to find out that someone else makes an announcement tomorrow,” he said while brushing away our queries on the final height of the tower.
“What I can tell you is that it will definitely be taller than Taipei 101, which is today the tallest commercial tower in the world,” he confirmed.
“And this is our warning to all competition – we will find out how tall your commercial tower is, and we will build this one taller than that,” he chuckled.
Taipei 101, formerly known as the Taipei World Financial Centre, was the world’s tallest tower since its completion, in 2004, until the unveiling of the iconic Burj Khalifa in 2010. It is still the world’s tallest commercial tower.
In addition, he revealed that the tower will deploy modern building techniques and use less concrete and more steel in its construction. “This will afford us to have less column blocks, thus offering more space to end-users,” he said. “After view, customers are most concerned about the space they get,” he said.
“I don’t care much about the architects,” he said. “We will build the building inside-out, offering maximum space to customers,” Bin Sulayem added.
“And from experience, we’ll avoid the challenges and mistakes of past,” he said, “and with all our experience as a developer and free zone authority, we will ensure that this tower is second to none.”
Bin Sulayem did not disclose the completion date for the project. “You know, if you take into account the technology that is available today, competition can work backwards from the completion date and could hazard a guess on the height of the tower – so I’m not going to divulge that,” he said.
Is it the right time, though, to announce the world’s tallest commercial tower when the global economy is still tentative at best? “On average, DMCC welcomes over 200 companies per month to its Free Zone, which is an average of six companies per day, and more than 90 per cent of these are new entrants to Dubai,” said Bin Sulayem.
“We have gauged the demand, and it isn’t contractual or anecdotal – it’s factual,” he proclaims. “When we announced the plans to build Almas Tower in 2002, the Middle East’s tallest commercial tower, 63 floors of office space sold out in a matter of hours,” he said.
“Until its completion in 2009, we had retained five floors with us to provide for an observation deck among other plans, but strong market demand forced us to put the 62nd and 63rd floors up on lease, but at prices at which others were selling their offices,” he says, revealing that DMCC leased the floors at Dh360 per sq ft at a time when offices in comparable locations were being leased at one-fifth of the cost.
Almas means diamond in Arabic, and the 68-storey tower also hosts DMCC’s headquarters besides a number of diamond businesses. In the past couple of years, Dubai has emerged as one of the top three diamond trading hubs in the world, rivalling the established diamond trade centres of Mumbai and Antwerp.
“I am a commodities man,” Bin Sulayem likes saying, “and I can tell you that right now, there is good demand from commodities businesses across the world to set up offices in Dubai,” he says. “And I’m talking about large multi-nationals, who want not just one but between four to eight floors to house their entire regional headquarters in Dubai,” he adds.
“There’s not only gold and diamond, or oil and gas, but also pepper, pulses… you name it,” says Bin Sulayem. “Every large multi-national in the commodities business today has Dubai on their radar, and the DMCC on their radar,” he says.
“Soon, you’ll hear about bullion and diamond financing from Dubai,” he reveals. “There has been unprecedented interest in polished diamond tenders,” he adds. “All these businesses will need space in Dubai,” he says.
“Dubai is already the world’s top re-exporter of tea,” he says. “Last year, gold trade from the emirate was worth $70 billion – and this year, because of the gold price decline, trade has been better,” he said. “It has been so good that there has been a shortage of bullion bars and investment coins in Dubai,” he says. “There’s plenty of demand,” he maintains.
“The world’s tallest commercial tower and the DMCC Business Park are the next natural steps to ensure we continue to welcome companies to the free zone as demand grows – particularly large regional corporations and multi-nationals – in the near future. The initiative is designed to further strengthen Dubai’s position as the global hub for commodities trade and enterprise,” he adds.
According to DMCC, it has attracted more than 4,000 new companies to the Free Zone over the past four years, and 90 per cent of such businesses are new to Dubai. This year in particular has been a great growth story for DMCC, says Bin Sulayem, with an average of 200 new companies joining DMCC every month. We had about 260 new companies joining DMCC in the month of May,” he said.
“This increased demand further demonstrates not only the confidence in DMCC and Dubai, but also underlines the need for new commercial space,” he added. The DMCC Business Park will comprise of 107,000 square metres of commercial and retail space.
But a grand tower such as this will also require a large amount of financing to meet construction costs. How is DMCC planning to foot that bill? Bin Sulayem, for one, isn’t perturbed about project finance. “We launched a $200 million gold sukuk in 2005 to finance the construction of our commercial towers,” he says. “That sukuk was fully subscribed, and we repaid it in full and on time,” he adds.
“The markets have full faith in our ability as a free zone and as a master developer. I have the confidence that everyone will want to be part of this tower. I don’t see any problem in coming up with the finance,” he says.
The DMCC’s media statement announcing the tower also quoted an investment bank vouching for the free zone authority’s financial credentials and capability to successfully undertake this project.
“DMCC has not had any external debt for several years,” said Islam Zughayer, Managing Director and Head of Berenson Mena, an investment banking firm with offices in New York, Dubai and Kuwait. “Prudent fiscal management and focused leadership have allowed DMCC to maintain a healthy balance sheet that can support a project of this magnitude. Given DMCC’s track record and substantial experience with commercial towers, we believe DMCC is perfectly positioned to deliver this project successfully,” he said.
Today, almost 7,000 members from start-ups to multi-nationals operate from the DMCC Free Zone, with a stated target of 7,200 member companies by the end of 2013 – a target that it expects to reach in the very near future. “As this growth continues, we will have 10,000 businesses by the end of 2014, or early 2015,” Bin Sulayem said.
With 65 mixed-use commercial and residential towers and over 180 retail outlets in operation, there are currently over 65,000 people working and living within the JLT development.
“The indirect value of the building and the Business Park will be that it will encourage a host of businesses to come into Dubai, and make it very difficult for any kind of commodities business to ignore Dubai,” he said. It’ll be difficult, indeed, to ignore a city with the world’s tallest tower, the world’s tallest residential tower, the world’s tallest hotel, and soon the world’s tallest commercial tower.