Abu Dhabi to expand ADGM to create one of world's largest financial districts

Decision increases jurisdiction to include Reem Island

Abu Dhabi Global Market Square on Al Maryah Island, Abu Dhabi. Mona Al Marzooqi / The National

The Abu Dhabi Global Market is set to expand tenfold as the UAE seeks to increase the size of its its financial sector under its economic diversification strategy.

As part of a new Cabinet resolution, Reem Island will be added to its jurisdiction as a financial free zone, which already includes Al Maryah Island, increasing the district's combined geographic area to about 1,438 hectares, the ADGM said on Monday.

The move will make it one of the world’s largest international financial districts, the ADGM said.

The expansion will provide an “opportunity for Abu Dhabi to reinforce its position as a world-leading international financial centre and a global destination of choice”, said Ahmed Al Zaabi, chairman of the Abu Dhabi Department of Economic Development and the ADGM.

“Al Maryah Island is a thriving international financial centre, with occupancy already over 95 per cent and a strong pipeline of international companies wanting to expand or establish their footprint here,” he said.

“We have prioritised our ongoing efforts to continue to grow towards accommodating this ever-increasing demand.

“Al Maryah’s larger next-door neighbour, Al Reem Island, also presents an abundance of opportunities, with access to a wide range of office spaces and world-class residential, educational, medical and lifestyle facilities.

“Together, as ADGM, Al Maryah and Al Reem Islands will be one of the most attractive places to live and work across financial centres worldwide.”

The UAE has been seeking to attract more businesses as part of its economic diversification strategy and has announced several new measures, including the expansion of the 10-year golden visa programme and free trade agreements with different countries to boost foreign investment.

The country has also introduced the NextGenFDI initiative, which offers incentives to digital companies to convince them to set up in the country.

Set up eight years ago, the ADGM has 1,400 operating entities and a workforce of 11,000 people.

Last year, it grew its assets under management by 56 per cent, with total active licences up by 30 per cent annually to 5,546, including permits for both financial services and non-financial companies.

An additional space of 32,000 square metres was also added with the introduction of Al Maryah Tower in 2022, “reflecting the ongoing growth of occupancy in ADGM square”, the financial free zone said.

To meet growing demand for office space in the area, Aldar Properties and Abu Dhabi's sovereign wealth fund Mubadala Investment Company also signed an agreement in March to jointly develop commercial assets on Al Maryah Island.

The new assets will be developed through a joint venture, with Aldar owning 60 per cent and Mubadala holding the remaining 40 per cent stake.

ADGM authorities are also carrying out several initiatives to support businesses.

The ADGM’s Financial Services Regulatory Authority (FSRA) enhanced its capital markets framework last year with the introduction of environmental instruments to enable trading in carbon credits and offsets.

The new regulations resulted in the world’s first fully regulated carbon trading exchange and carbon clearing house, AirCarbon Exchange, establishing its global operations in Abu Dhabi.

This month, the FSRA also enhanced its regulatory framework to enable ADGM-based collective investment funds to invest in credit by originating and participating in credit facilities.

The move is aimed at encouraging investment in the Middle East’s private credit market by providing clear and transparent rules for credit fund managers operating within the ADGM.

The financial district has attracted major international companies.

In April, Ray Dalio, the billionaire founder of Bridgewater Associates, the world's largest hedge fund, said he was establishing a branch of his family office at the ADGM, as part of his expansion in the Middle East.

The Dalio Family Office builds on a 30-year relationship between Mr Dalio and the UAE, the financial centre said.

The ADGM and its authorities are currently working with government stakeholders and other local authorities to finalise the necessary transitional arrangements that cover the activities of all entities presently operating on Reem Island, including those engaged in the financial services industry, the ADGM said on Monday.

The relevant ADGM authority will contact the Reem Island community with the transition process in due course, it said.