Abu Dhabi opens its doors to ‘masters of the universe’

Unsplash/Kamil Rogalinski

You can tell you’re on the way to something big when you look south crossing the Sheikh Khalifa Bridge on the way to Abu Dhabi.

From the mangroves and low-rise residential buildings of Yas, Jubail and Saadiyat islands, you suddenly hit a forest of skyscrapers that screams “bright lights, big city”. 

It’s reminiscent of the view of Manhattan from the Queens side of the East River in New York.

In fact, you’re looking at what will become the biggest financial centre in the world by size, and by some distance.

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Last week the capital announced plans to join Al Reem island – home to some of the skyscrapers you see from the bridge – to its neighbouring Al Maryah island under the jurisdiction of the Abu Dhabi Global Market (ADGM).

That will increase the size of the capital’s financial free zone tenfold. If you take a look at the map below, you’ll see the relative scale of the two developments.

ADGM

To go back to the New York analogy, it’s almost as if the Wall Street financial district – a relatively small area on the tip of Manhattan island – had been extended all the way up to Central Park. 

Having covered the launch of the capital’s financial freezone as a journalist in 2015 and been an ADGM visa holder for some years after that, Al Maryah affairs had slipped off my radar, and it had been on my “to do” list for some time.

It was a great opportunity to gauge ADGM’s progress towards its ambition of becoming a leading financial hub, and assess the potential that the Reem extension will give it.

The current setup on Al Maryah is impressive, but relatively small. The gleaming ADGM building sits in the middle of a square that accommodates four office towers, alongside two upmarket hotels and fancy restaurants, the posh Galleria Mall, and the elite Cleveland Clinic. Apart from some light industry almost out of sight, that is about it.

And it is as good as full. Ahmed Jasim Al Zaabi, ADGM chairman, put occupancy at some 95 percent taken already, with a waiting list of international companies looking to move in. That was one of the key motives behind the Reem move.

ADGM

The enlarged zone will comprise 1,438 hectares, or some 2,687 football pitches, I am informed by my iPhone converter.

ADGM insiders like to quote the comparables, from public sources. The City of London is some 290 hectares (though this excludes the Canary Wharf financial hub further down the Thames).

Wall Street is some 117 hectares, though again this doesn’t reflect the huge amounts of financial office space all round Manhattan.

The Singapore central business district consists of a compact 89 hectares.

The comparison they are less willing to make, of course, is with the Dubai International Financial Centre (DIFC). Ever since launch, both financial hubs have stuck firmly to a line that there is “no competition” between the two, and that the potential market is big enough for both.

However, international investors wanting to set up in the UAE will need to make the comparison at some stage.

For what it’s worth, DIFC is implementing its 2.0 plan that will increase its land area three-fold. It currently has 4,377 active registered companies employing around 36,000 people.

ADGM is home to 1,400 operating entities, has issued 5,500 business licenses, with 11,000 people employed in ADGM Square.

The addition of Reem will change the dynamics not just in the UAE, but also in the region.

In Saudi Arabia, Riyadh is making its own case to be a financial hub with the King Abdullah Financial District, which is open and welcoming investors to the purpose-built development in the kingdom’s capital.

Further out Neom, the $500 billion mega-project in the northwest of the Arabian peninsula, has big but so-far unspecified ambitions in the financial sphere.

There is also niche competition from the financial centres in Qatar, Bahrain and Kuwait.

A drive around Reem shows the scale of the potential. The island is already a mix of residential, commercial and retail/leisure, with some pretty impressive high-rise architecture like the Gate Towers building, as well as marinas, malls (with a snow park, of course), and parks.

The Sorbonne University of Paris is also located on the island.

As part of the financial free zone, Reem residents can expect to benefit from 100 percent foreign ownership of businesses and profit repatriation, as well as zero corporation tax, which is being introduced by the UAE government this year.

The unification of Al Maryah and Al Reem islands under ADGM jurisdiction is a bold, ambitious statement of intent by Abu Dhabi in the increasingly competitive regional financial market.

All it needs now is for the “masters of the universe” to move in.