Dubai Holding, the investment conglomerate of the Dubai government, has appointed its Tecom Group subsidiary to develop the mixed-use Dh5 billion Emirates Business Park project that will expand the emirate's financial free zone, the Dubai International Financial Centre (DIFC). Tecom also appointed a dedicated chief executive to oversee the project, which was unveiled earlier this month.
The investment company said Tecom will develop and manage the project, which is set to contain four high-rise towers and a number of other buildings. The project, is being developed as a collaboration between Dubai Holding and DIFC, where tenants being able to access the financial centre directly by footbridge and firms within Emirates Business Park will benefit from the same legal and regulatory status.
Work is due to start on the project by the end of this year, with completion due within four years.
The new business park will offer premium office space and contain three five-star hotels, plus new food and beverage units, and a space dedicated to host events and other functions.
“Choosing Tecom Group to take over the development and management of Emirates Towers Business Park reflects the confidence and distinct status that the group enjoys as a leading developer and operator of the region's most successful business communities,” said Amina Al Rustamani, the chief executive of Tecom.
The investment group already runs a number of business parks in the emirate, including Dubai Media City, Dubai Design District (d3), Dubai International Academic City and Dubai Wholesale City.
Tecom's chief commercial operator and acting chief operating officer, Fareed Al Janahi, has also been named as chief executive for the Emirates Towers Business Park project.
Ms Rustamani argued that its launch “comes at an opportunistic time” as there is demand for prime, commercial office space in Dubai.
“Premium commercial space accounts for 20 per cent of the total business space currently available in Dubai, with an occupancy rate of 92 per cent,” she said.
“The growing demand for distinguished business space is evidence that Dubai remains a preferred destination for key international and regional companies, given the Emirate's strategic location and business-friendly environment.”
Property consultancy Cluttons said that Emirates Business Park is the most exciting commercial development in Dubai in 10 years.
The firm's head of research, Faisal Durrani, said that the project was "a huge positive for the market" as it will meet an increasing demand for premium space. Its latest Office Market Bulletin published last Thursday said that city-wide demand for commercial space has been "weaker than normal" so far this year, but that performance varied. Lower-level rents in Deira dropped by 16.7 per cent to Dh50 per sq ft, but rents for the priciest offices in Business Bay increased by 12 per cent to Dh140 per square feet.
Rents in DIFC remained the highest in the city at about Dh370 per sq ft and occupancy levels at near 100 per cent, which it argued was due partly to the “strong prestige factor" of being based in the district, alongside the fact that it is an internationally-regulated free zone.
Mr Durrani said that Dubai "is moving rapidly from being a regional hub to a global one and the new Emirates Towers Business Park is expected to complement the DIFC, effectively expanding the city's financial district and putting it on a path to rivalling the City in London, or New York's Wall Street."
For the DIFC, the new development will help fulfil its ambition to triple in size by 2024 to house 1,000 active domiciled financial firms compared with 362 in 2014, with a members' combined balance sheet of US$400 billion and a total workforce of 50,000.
"With DIFC regulation, and therefore free zone status within this premium zone, the Emirates Towers Business Park will likely relieve demand pressures on core DIFC stock," said Paula Walshe, the head of international corporate services at Cluttons, "Already, international occupiers pay more rent per square foot than any other commercial building in Dubai for office space within the on-shore Emirates Towers office building, which is at the heart of this new development. With that in mind, we expect demand and rental levels for space in this zone to be strong.”
