DIFC 2.0 plan to grow hub area and attract FinTech investment

Plans to expand Dubai’s financial centre to three times its current footprint are set to offer investors an international base for FinTech services, while the addition of retail and leisure spaces will boost its attractiveness as a central business district, analysts say.

The Dubai International Financial Centre will expand to include more offices, residences, retail and leisure offerings to create “DIFC 2.0”, a plan approved on Monday by Sheikh Mohammed bin Rashid, Prime Minister and Ruler of Dubai.

The expansion should attract more investments and solidify the DIFC’s position as the region’s top finance centre, analysts say.

““DIFC’s expansion plans will strengthen the emirate’s position as the region’s central economic and commercial hub and offer an international platform for FinTech and business innovation, augmenting the DIFC’s status as a leading global financial centre,” said Ehsan Khoman, head of Mena research and strategy at MUFG.

The DIFC, the government-owned free zone, is the biggest finance hub in the Middle East and hosts international banks, investment companies, insurance companies and financial service consultancies.

Dubai jumped four positions to rank 15th in the Global Financial Centres Index, a survey of the world’s most attractive financial centres.

New York overtook London as the world’s most attractive financial hub after the Brexit decision.

Once finalised, the district will have 594,579 square metres of office space, 241,548 sq metres of creative space, 139,355 sq metres of residences, 120,774 sq metres of retail space and 65,032 sq metres devoted to leisure and entertainment.

“Like any new development, especially one of this scale, the key to success and integration into the existing market will be in the phasing,” said Simon Townsend, senior director at real estate advisory CBRE.

Demand for prime office space will continue from global corporate clients such as those in DIFC or the Dubai World Trade Centre while the secondary and sub-prime office market will continue to face challenging conditions, continuing a pattern of a “two-tier” commercial property market, Mr Townsend said.

While the additional units in the DIFC pipeline will increase the supply in the market, it will allow the emirate to better serve the financial and tertiary services industry, said Murray Strang, head of Dubai for Savills.

“It proves that DIFC is successful and that Dubai has a long-term view on being a great place to do business,” Mr Strang said.