The Dubai International Financial Centre added a record number of companies last year, driven by a sharp rise in the number of asset and wealth managers in the financial hub of the emirate, which now plans to double its size by the end of the next decade.
DIFC, one of the fastest-growing onshore financial hubs of the broader Middle East, North Africa and South Asia region, registered 1,924 new companies in the 12 months to the end of December, a 28 per cent annual increase, DIFC governor Essa Kazim said at a media briefing on Thursday.
The number of active registered companies at the end of last year surged to 8,844, employing more than 50,000 people in the centre.
“DIFC achieved another year of record breaking results and of course, such results have further contributed to consolidated DIFC as undisputed [leading] regional financial centre in the region, and significant contributor to the growth and development of Dubai economy” Mr Kazim said.
“We also remain significant contributor to the financial service sector of Dubai GDP, as well as the UAE economy.”
Last year, DIFC revenue rose to Dh2.13 billion, a 20 per cent annual increase, while net profit of the financial hub jumped by 28 per cent to Dh1.48 billion.
The financial hub is set to follow the same growth trajectory this year, and may even pass the pace achieved last year, with the tally at the end of the first month showing great promise with 30 per cent year on year growth.
“If we take the first month as an indication and extrapolate that data into full year, we have been achieving our targets and beyond the same growth that we have witnessed last year,” Mr Kazim said.
“We are very optimistic to really continue with the same strength and with the same organic growth rate that has been achieved and from the same categories that have been contributing to our growth in the past.”
In terms of new registration, DIFC added 2,525 companies to its register, a 40 per cent annual growth, which Mr Kazim described as “staggering” and the highest, the financial hub has achieved in the past five years, driven both by financial and non-financial sector companies.
Next phase of growth
The sharp growth trajectory, which the more than two-decade-old financial hub has maintained over the years, has prompted Dubai to plan to double its size.
The centre is among the key planks of Dubai's growth ambitions and is aligned with the Dubai Economic Agenda, the initiative known as D33, which aims to double the size of the emirate's economy to Dh32 trillion over the next decade and establish Dubai among the top three global cities.
Last month, Dubai unveiled a Dh100 billion ($27 billion) expansion plan for the second phase of DIFC, as known DIFC Za'abeel District, which on completion, will boost the centre’s capacity to 42,000 companies and house 125,000 professionals across more than 1.5 square kilometres of floor space.
Launched by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, DIFC Za’abeel District will help position Dubai among the top four global financial hubs.
The first phase of the new district is set to be completed by the end of this decade and will cost Dh20 billion to complete, Mr Kazim said.
DIFC plans to fund the development through a combination of internal financing and future cash flows, and to fill any funding gaps through bank financing, Mr Kazim said.
DIFC expects to finance the first phase of the development through its own funding, he added.
DIFC has opened expressions of interest for the sale of residential units in the upcoming Za’abeel District and has received a strong response from potential buyers, DIFC chief executive Arif Amiri told media.
Financial sector boom
DIFC, which is home to global investment banks, insurers, global consulting companies, family offices, hedge funds, as well as wealth and asset management and financial technology companies, recorded a 28 per cent annual increase in the number of financial sector companies.
The number of wealth and asset managers now exceeds 500, while there are more than 290 banks and financial markets companies that DIFC is home to, including 102 hedge funds and more than 1,289 family-related entities.
Allianz Trade, Cambridge Associates, CapitaLand, China International Capital, Howden Reinsurance, ICICI Asset Management, Manulife, National Bank of Kuwait, North Rock Capital, Pimco, Silver Point Capital, Squarepoint Capital, Turkiye Vakiflar Bankasi and Warburg Pincus were among the companies that joined DIFC register last year.
“It is a very successful story that DIFC has managed to achieve in the past few years, and that has also reflected on the family businesses, one of the main pillars of DIFC, and it has been the fastest growing sector for us,” Mr Kazim said.
