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Record occupancy at DIFC despite Riyadh’s HQ drive

The DIFC is now home to 5,523 companies, up 26 percent year-on-year reflection DIFC building Thamer Al-Hassan/Flickr
The DIFC is now home to 5,523 companies, with 1,451 new registrations in the last 12 months
  • ‘Fastest growth’ ever at financial centre
  • 26% occupancy rise in 2023
  • Riyadh’s HQ programme not dented growth

Occupancy levels in Dubai’s International Financial Centre (DIFC) have risen significantly in the last year, despite strong competition from neighbouring Saudi Arabia.

“The fastest growth we ever witnessed in the DIFC has been in the last three or four years,” Essa Kazim, the DIFC governor, told a media briefing on Thursday.

He revealed that the DIFC is home to 5,523 companies, a year-on-year rise of 26 percent compared with 2022, with 1,451 new registrations in the last 12 months. The free zone’s total workforce increased 15 percent year on year to 41,597.

Saudi Arabia’s Riyadh Headquarters programme set a target of January 1, 2024, for companies to set up in the kingdom, to be able to gain access to government contracts worth SAR1 million ($266,000) or more.

It was reported last month that more than 200 companies were licensed to operate their regional headquarters from the Saudi capital.

The programme has not dented growth at the DIFC, however.

“It doesn’t matter to us whether it is called RQ [regional headquarters] or HQ [headquarters] or any other names,” said Kazim.

“The name doesn’t matter much to us and that’s why you’ve seen the highest growth in terms of the number of companies, in terms of the diversity of the centre, that has taken place.”

Arif Amiri, chief executive officer of DIFC Authority, said a total development space of roughly two million square feet will be added in the next five years as part of the DIFC 2.0 project to triple the size of the centre.

Ground is expected to be broken on the development in the third quarter of this year.

DIFC reported annual revenues of almost AED1.3 billion for 2023, 23 percent up on 2022, while operating profit hit AED859 million, a rise of 27 percent year on year.

The financial hub, which celebrates its 20th anniversary this year, is home to 200 banks, more than 100 insurance companies and over 900 fintech companies.

Half of the total companies registered with the authority are from emerging markets and as much as 40 percent from Europe, the US and UK.

Despite a global slump in commercial property, occupancy levels at DIFC-owned and managed properties currently stand at 99.5 percent, with 90 percent of space already leased out.

“I don’t think we are facing any issues of leasing out our properties,” said Kazim.

Last year, the authority launched its inaugural residential venture, DIFC Living, which sold out in 48 hours and is expected to be delivered in 2026.

Hedge fund activity

Large numbers of hedge funds registered at the centre in 2023, including Asia Research & Capital Management, Brevan Howard, Crescent Capital, Lighthouse Partners and Qube Research & Technologies.

Salmaan Jaffery, DIFC Authority’s chief business development officer, said 50 hedge fund registrations to date have been authorised, with “probably an equal number” in conversation stage.

Dubai has the highest concentration of wealth of any Middle Eastern city with over 68,400 individuals having more than $1 million of investable wealth, which is triple the number of any other city in the region, according to a DIFC report.

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