With its towering glass and steel office blocks and striking architecture, walking around Abu Dhabi’s newly named financial district Abu Dhabi Global Market Square on Al Maryah Island, it is easy to draw grandiose comparisons with the early days of London’s Canary Wharf and Paris’s La Defense.
Crossing the bridge from close to the Abu Dhabi Mall on to Al Maryah Island, one is immediately struck by the soaring ultra-modern buildings of the office, hotel and shopping district that would not look out of place in major US or European cities.
Like in many international financial centres, the streets in this quarter of town are not exactly bustling with people, but a few well-heeled visitors climb in and out of luxury cars or shuffle around the upmarket boutiques.
Walk past the vast new Rosewood Hotel — the first in the country — and keep strolling past the glitzy new Galleria shopping centre replete with its 121 luxury stores, to the development’s first 183,000 square metres of high-end office space arranged in four huge blocks.
The office component of what was once known as Sowwah Square and has now been dubbed Abu Dhabi Global Market Square is set to form the beating heart of what is soon to become the capital’s new financial free zone.
"Sowwah Square is the commercial epicentre of Al Maryah Island, Abu Dhabi's dynamic mixed-use central business district," its says on the website of the developer of the project Mubadala Development. "It is home to more than 40 global blue chip companies."
According to the Sowwah Square website, current tenants include: the banks ADCB, BBVA, Société Générale, First Gulf Bank, Macquarie, JP Morgan, Santander and Royal Bank of Scotland; the law firms Norton Rose, Linklaters, Clifford Chance, Al Tamimi and Herbert Smith; the financial advisory firms Deloitte, Accenture, Investcorp and Perella Weinberg; the property companies Bloom and Farglory; and the energy companies Taqa, Dolphin and Mubadala Petroleum.
Yet about 98,000 square metres of office space in Abu Dhabi Global Market Square sits empty and has done so for the past two years, waiting for the free zone’s authority to make a final ruling over who will be allowed to lease offices in the area and what business activities they will be allowed to undertake.
Free zone and onshore companies operate under different rules. Organisations must operate as one or the other or establish a parallel business in order to operate as both. Without clear rules over which businesses are allowed to operate in the free zone, companies have been unable to commit to taking space on the island.
At the start of January, Abu Dhabi Global Market (ADGM), the body in charge of the proposed financial centre, published consultation documents that will form the basis of legislation paving the way for operations at the ADGM free zone’s to formally begin.
The move means that the extra office space on Al Maryah Island is finally likely to come back into play.
The documents not only reveal that the market will be based directly on English common law, and influenced by the legal systems applied in Singapore and Hong Kong, they also contain detailed proposals for how ADGM will structure company law, insolvency practice, employment and property legislation, as well as its own operating regulations.
Yet many potential tenants looking to take space in what is now known as ADGM Square will have to wait a while longer for more concrete guidance.
Although the new draft regulations go into minute detail regarding the new insolvency laws to be used in the free zone and even make provision for strata law and mortgage laws that have yet to be enacted in the rest of the emirate, the proposals remain so far quiet on the subject of what activities can actually take place within the free zone.
Financial, legal, accountancy services, hotels, shops, restaurants and coffee shops, hospitals, property agents and developers are all named in the third consultation paper of the draft regulations as the sorts of activities likely to be allowed to trade in the new zone. However, it adds that the actual rules governing the licensing and supervision of firms operating in the free zone and companies excluded from trading there will be set out in secondary legislation.
Local property brokers say the lack of clear guidance over which firms will be allowed to operate in the new free zone has not stopped space being offered for lease now to select tenants who, it is fairly certain, will be able to trade in the new free zone, such as lawyers, accountants and management consultants. But leases are not currently being offered where the situation is less clear cut, such as for global banks that might want to offer services to local onshore investors as well as trade in offshore commodities, brokers for instance.
Mubadala was unavailable to comment over whether it was currently leasing out remaining office space in the project or under what terms it was leasing the space.
Matthew Dadd, a property director at Knight Frank, says that there is definitely demand for additional prime office space in Abu Dhabi.
“But at the moment it’s a bit of a Catch 22 situation. International companies will not start to look at Abu Dhabi Global Marketplace until the legal framework has been fully established and the directives about exactly who can take space and under what conditions are made clear. So at the moment it’s very hard to gauge demand for space in the free zone,” he says.
However, an ADGM spokesman says ADGM would “only be in a position to issue licences, for both financial and non financial firms, once the open consultation process is complete and the final non-financial and financial regulations are adopted by the ADGM board of directors”.
David Dudley, a regional director for JLL in Abu Dhabi, says that ADGM’s extensive public consultation to receive feedback from all key stakeholders is positive for the market. “Putting in place a new transparent regulatory regime based on English law will help attract international companies,” he says. “A key outcome of the public consultation exercise will need to be giving greater clarity on which activities can and cannot operate in the free zone — particularly within the financial services sector.”
lbarnard@thenational.ae
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Getting there
The flights
Flydubai operates up to seven flights a week to Helsinki. Return fares to Helsinki from Dubai start from Dh1,545 in Economy and Dh7,560 in Business Class.
The stay
Golden Crown Igloos in Levi offer stays from Dh1,215 per person per night for a superior igloo; www.leviniglut.net
Panorama Hotel in Levi is conveniently located at the top of Levi fell, a short walk from the gondola. Stays start from Dh292 per night based on two people sharing; www. golevi.fi/en/accommodation/hotel-levi-panorama
Arctic Treehouse Hotel in Rovaniemi offers stays from Dh1,379 per night based on two people sharing; www.arctictreehousehotel.com
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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Engine: 3.5-litre V6
Transmission: eight-speed automatic
Power: 290hp
Torque: 340Nm
Price: Dh155,800
On sale: now
Other workplace saving schemes
- The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
- Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
- National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
- In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
- Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Paris Can Wait
Dir: Eleanor Coppola
Starring: Alec Baldwin, Diane Lane, Arnaud Viard
Two stars
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%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.3-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E299hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E420Nm%20at%202%2C750rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E10-speed%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E12.4L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh157%2C395%20(XLS)%3B%20Dh199%2C395%20(Limited)%3C%2Fp%3E%0A
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Results
Stage Two:
1. Mark Cavendish (GBR) QuickStep-AlphaVinyl 04:20:45
2. Jasper Philipsen (BEL) Alpecin-Fenix
3. Pascal Ackermann (GER) UAE Team Emirates
4. Olav Kooij (NED) Jumbo-Visma
5. Arnaud Demare (FRA) Groupama-FDJ
General Classification:
1. Jasper Philipsen (BEL) Alpecin-Fenix 09:03:03
2. Dmitry Strakhov (RUS) Gazprom-Rusvelo 00:00:04
3. Mark Cavendish (GBR) QuickStep-AlphaVinyl 00:00:06
4. Sam Bennett (IRL) Bora-Hansgrohe 00:00:10
5. Pascal Ackermann (GER) UAE Team Emirates 00:00:12
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