Dubai’s sovereign wealth fund (ICD) is building a $1bn development in the heart of the emirate’s financial district, DIFC. This is the first new construction project in the area since the financial crisis of 2008.
The development, next to the core cluster of Dubai International Financial Centre buildings, is also the first project by a joint venture between Investment Corporation of Dubai and Brookfield, the Canadian asset manager.
ICD Brookfield Place is a vote of confidence from the government in continued growth in its financial centre amid increasing competition from neighbouring hubs, including a new free zone in the richer emirate of Abu Dhabi.
The project will comprise a 50-storey office tower, hotel and retail outlets. The first tenants are expected in 2018, which makes sense as the economic prospects will be at all times high due to the World Expo 2020.
Dubai’s state holding company, which controls companies such as Emirates airline, served as a lender of last resort for troubled businesses during the financial crisis and is turning to overseas and domestic investments.
The ICD has previously helped DIFC, buying some of its assets ahead of a refinancing in 2012 that put the financial centre on firmer financial foundations.
Quality office space in prime locations such as the DIFC continues to attract strong demand, especially from multinationals, though a glut of less desirable offices further out weighs on the broader sector, where occupancy is about two-thirds.
The Dubai International Financial Centre, where core buildings are fully occupied, has established itself as the premier hub for financial services companies in the Gulf.
More than 15,000 people work at the complex, which houses law firms and consultancies, as well as financial groups. Buildings owned by third-party developers and planned to open this year will provide space for another 15,000 workers, the DIFC said last year.
The DIFC hopes more competitive rents and telecoms costs will ensure a steady stream of new financial entrants to the free zone, which operates under a separate regulator and legal system to onshore UAE.
