Abu Dhabi Global Market, the body that oversees the new Abu Dhabi financial free zone, has signed a 50-year lease to take one of the most prestigious new buildings on Al Maryah Island.
ADGM said yesterday that it had signed a new lease on the anvil-shaped building formerly known as the Financial Building in the centre of the new free zone with Mubadala Development Company subsidiary AlSowah Square Properties.
Mubadala originally built the glass structure for the Abu Dhabi Securities Exchange, which was expected to move operations from its existing headquarters on Hamdan Street in the city centre to the Financial Building in 2012.
However, although the building was fitted out for the arrival of the bourse, the move was never completed, with ADX officials citing “technical issues” for delaying the move.
ADGM said yesterday that it would lease the entire building as its headquarters, where it will locate its financial services regulations bureau, its registration bureau and its courts.
“The signing of this lease represents a key milestone in the development of our physical premises that will home our three core entities that will enable ADGM to become a leading financial centre in the heart of our capital city,” said Ahmed Al Sayegh, the chairman of ADGM.
ADGM and Mubadala said that the district which also includes 180,000 square metres of offices, the Rosewood hotel, the Cleveland Clinic and the Galleria shopping centre would be renamed from Sowwah Square to Abu Dhabi Global Market Square and the Financial Building will now be named Abu Dhabi Global Market Building.
ADGM published a first set of draft regulations on January 7 setting out how the free zone will function. They included proposals for the introduction of strata laws and owners associations.
Two of the office blocks at ADGM Square remain empty after Mubadala stopped signing up tenants to take space at the complex in 2013 when the financial free zone was established by government decree as it waited to find out what business activities would be allowed on the island and what sorts of tenants it could attract.
“The finalised regulations governing Abu Dhabi Global Market have yet to be published and a lot depends on what the regulations say,” said Ian Albert, the regional director for the Middle East at Colliers International. “Abu Dhabi suffers from a lack of grade-A office space and so there could well be demand for space in the two empty buildings at what was Sowwah Square but if all of that space comes on to the market at once we would expect commercial rents in the city to either remain the same or decline slightly. It really depends how many companies would want to upgrade to ADGM Square and that will depend somewhat on what the final regulations say.”
JLL data for the third quarter of last year show that the capital had 3.1 million square metres of office stock. It said that grade A rents had risen to Dh1,640 per sq metre in 2014 from Dh1,540 per sq metre in 2013 – the first increase since the global financial downturn – which was partly the result of a lack of new office space.
The ADX was not available for comment yesterday on the stock market's proposed move to Al Maryah when contacted by The National. A Mubadala spokeswoman said the company was not best placed to comment on any developments related to the ADX's plans for the Al Maryah island location.
“ADGM and Mubadala’s signing of a 50-year lease for Abu Dhabi Global Market Building does not preclude any activity or entity from being established in what is now known as Abu Dhabi Global Market Square,” an ADGM spokesman said.
“ADGM is being established as a new broad-based international financial centre. Its initial activities will be focused on private banking, asset management and wealth management,” he said. “In time, ADGM is expected to expand to include other financial services and activities. These may include trading of, for example, commodities, securities, equities or derivatives according to market demand. ADGM will be flexible and responsive to the needs of the market and its member institutions.”
lbarnard@thenational.ae
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