DIFC on track to triple in size by 2024 from 2014 levels amid record performance

The financial free zone registers record number of new companies as total assets under management rose to $99bn

DIFC District. Courtesy Dubai International Financial Centre Authority
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Dubai International Financial Centre is on track to achieve its 2024 growth targets of tripling in size from 2014 levels. The free zone attracted a record number of new registrations last year and total assets under management of the companies at the hub nearly touched $100 billion (Dh367bn), its governor said.

The DIFC registered 437 businesses, a 39 per cent growth driven in both financial and non-financial companies, especially those in FinTech, Essa Kazim said on Tuesday. The number of new companies translate roughly into two additional ones per working day in 2018, he said.

"We had a superb year in 2018. Certainly that result will contribute to consolidate DIFC's position as a major international hub and also support Dubai's drive for [economic] diversification,"
Mr Kazim said.
"We continue to be focused on delivering our 2024 strategy. FinTech will be playing a major role in being the engine of growth going forward."

The DIFC, one of the top onshore financial free zones in the Middle East, aims to triple in size, raising the number of financial companies to 1,000, housing 50,000 employees and reaching assets under management at the centre to $250bn
by 2024.

The overall number of people employed at DIFC jumped to more than 23,000 and assets climbed to $99bn last year, Mr Kazim said. The number of financial companies increased to 625 in 2018, and the total number of companies rose to 2,137.

Of the 625 financial businesses, 35 are Fintechs registered in 2018, 66 are funds and 31 are family offices. The rest are core financial institutions including big banks, according to the annual review presentation.

The DIFC has invested $23 million over the past year on developing the FinTech sector and has signed 11 agreements with similar hubs and global investors, to develop the technology. The DIFC also posted a 5 per cent year-on-year jump in its consolidated revenues last year to $199m, while its net profit climbed 11 per cent to $88m, Mr Kazim said.

"DIFC is on the growth patch again on a much, much bigger base. We had one period of exponential growth between 2004 and 2008, and that growth is being replicated," he said.

DIFC now contributes about 3.9 per cent to Dubai’s gross domestic product, the
governor said.

The free zone is continuously building its soft infrastructure, part of which is strengthening the legal and regulatory environment. It has revised the trust, foundation, property and companies law among others, to match with international standards.

“We had a fresh look at many of our laws and some of them have been enacted last year and some are in the process of being enacted,” he said.

The centre leased 29,172 square metres of space last year, taking the total leased area to almost 390,193 square metres. DIFC's own portfolio of properties, which is valued at more than $3bn, is about 98 per cent leased and it is building the retail offering within the financial free zone.

The DIFC is developing the master plan for "DIFC 2.0", an extension that will triple its space. The centre is yet to
determine the size of investment required for the expansion, Mr Kazim said.

The project is a “medium to long-term plan” and it will be carried out in phases. “We will be launching it as the market requires and based on the market needs. We are not going to be flooding the market,”
he said.

DIFC will adopt “the best possible approach” in terms of how it will finance the mega development, its chief executive Arif Amiri said.

"All the options are available to us. We self-financed the last two projects. If you look at the size and scale of the new development, perhaps we need a different approach," Mr Amiri said.