_A new era of growth for Dubai International Financial Centre
DIFC is considered one of the most prestigious addresses in the United Arab Emirates and the wider region, but why? It offers occupants international Grade A office accommodation, access to a community of over 21,000 professionals, a world-class regulatory and legal framework, substantial tax benefits, prime residential space, luxurious 5* hotels, world class dining and some of the most exclusive art galleries. This is compounded with its familiar common law framework and free zone status, has made it the location of choice, with current office occupancy at near 100% in the core buildings.
The forthcoming Gate Avenue at DIFC, due for completion in H1 2018 will offer connectivity to every building within the district. This improved accessibility will enable the Centre to operate more cohesively, connecting the commercial and residential buildings thus elevating DIFC’s position from a leading financial hub to a world-class business and lifestyle destination. By offering retail, F&B and leisure facilities this will enable the business district to become a fully inclusive masterplanned community, further heightening demand for this location from commercial occupiers.
Not only will Gate Avenue at DIFC benefit commercial occupiers, but the many residential occupants who choose to live in the DIFC. The Centre will benefit from an improved sense of community and connectivity, offering retail and leisure opportunities that have been missing from the district. In addition the DIFC will look to compound its place as a hub for Art and Culture, with a series of events being held along the parkways at podium level of Gate Avenue at DIFC that have previously been considered a great success in the past with community initiatives such as Art Nights. Food critics from around the world have considered Dubai one of the best location’s globally for restaurants (Conde Nast Traveller), with the city’s finest establishments all located in the prestigious Gate Village. Restaurants such as Zuma and La Petite Maison have been ranked in the top 100 restaurants globally by San Pellegrino, and the recently opened Artisan by triple Michelin starred chef Enoteca Pinchorri are all in preparation for the expected arrival of the Michelin Guide in the Emirate in the next couple of years, developing the DIFC as a prime location for F&B concepts.
For those who wish to reside in the DIFC; residential rates are amongst the highest in Dubai, comparative to that of Downtown and Palm Jumeirah. Unlike these locations however, residents of the DIFC tend to work in the free zone or nearby. Gate Avenue will enable residents, to walk to work 365 days a year, thereby easing traffic and parking in the local vicinity.
However, the existing masterplan will be positioned against the recent announcement of a new AED 5 billion venture by Dubai Holding for Emirates Tower Business Park, allowing the DIFC to continue with their growth aspirations of tripling the size of the Centre by 2024. DIFC will also look to strategically develop its properties, together with those owned and managed by third party developers, in due course, further expanding the delivery of prime commercial office and residential space in the district. Knight Frank expects greater absorption across all phases of the DIFC, as their clients look to consolidate onshore and offshore activities under the new dual licensing rules, which will provide certain existing DIFC registered entities the ability to benefit from greater efficiencies of working under one roof and therefore minimising the need to ‘double up’ on back of house services and administration.
The DIFC is however competing with existing free zones in Dubai and further afield and therefore needs to position and develop itself to maintain growth. A trend of developing fully inclusive masterplanned communities of Grade A Office space, leisure, retail and residential has matured in recent years. Nearby developments such as One Central at Dubai World Trade Centre look to develop a direct, dual licensed competitor to the lifestyle offering of the DIFC. Likewise, the future phases of Dubai Design District (d3) will also include all facets of real estate including amenities such as schools, community centres etc. Further announcements also include Jumeirah Central which looks to develop a compact community masterplan with a similar offering but with a ‘blank canvas’ from which to construct world class infrastructure.
The unique selling point and demand for the DIFC corporate occupier compared to its peers is the combination of its legal system, with their own dedicated courts and Common Law framework. These benefits should not be underestimated, as often it is a key feature that draws the big name law firms, banks and management consultants to the district.
The quality of the office accommodation is sufficient to meet most organisations minimum requirements, with many at Grade A quality. The launch of the Royal Institute of Chartered Surveyors (RICS) approved Middle East Council Offices guide, a regional specific alternative to the well-established British Council for Offices (BCO) standard, has seen landlords actively delivering quality commercial office stock that has been absent in the region until recently.
Future developments, such as The Exchange, located in DIFC’s Gate Village, and ICD Brookfield Place are adjusting to meet occupier requirements, with LEED certification now a key trend in the delivery of projects across the UAE which meets Corporate Social Responsibility (CSR).
In the region, the King Abdulla Financial District (KAFD) in Riyadh which although has faced delays in handover and leasing, is a state-of-the-art commercial district comparable to any worldwide. The project which is currently over 70% built will provide a robust offering to companies that wish to be based in the largest Middle Eastern market. Further afield, developments such as London’s Canary Wharf can be considered comparative, with the shopping at podium level connecting all major buildings and public transport throughout its masterplan, alongside fine dining, 5-star hotels, tube and residential throughout the mixed-use community.
The continued success of the DIFC will be built upon the existing framework, in both the legal and built environment. To maintain its position as a regional financial hub, the Centre must continue to introduce new laws and real estate offerings. Attracting clients, both commercial and residential, will depend on a balanced lifestyle dynamic and although other established free zones in Dubai are no competition, there is no room for complacency.