Abu Dhabi’s quest to attract top hedge funds to its financial center is creating a shortage of office space in the oil-rich emirate.
After struggling to attract tenants for years, the four sleek towers in Abu Dhabi Global Market, which has long sat on Al Maryah Island, are nearly full. The government is now working on expanding the free zone’s jurisdiction to neighboring Al Reem Island in a move that will give it ten times as much space and make it one of the largest financial districts on the planet, stretching 14.4 million square meters (3,558 acres).
As part of that, officials are ordering existing tenants of Al Reem Island to obtain an ADGM license or vacate their offices by the end of the year. About a quarter of those tenants will likely need to move, according to the commercial real estate giant Cushman & Wakefield Core.
"With growing demand for companies to locate within ADGM, occupancy rates in Al Maryah Island have exceeded 95%," a representative for ADGM said in an emailed statement. "Consequently, expansion is the next natural and necessary step to better accommodate the increasing demand of companies seeking to establish a presence in the financial hub of Abu Dhabi."
Those forced to leave the hub will enter a commercial real estate market that’s been transformed by the broader shift in wealth to the capital of the United Arab Emirates, which sits on 6% of the world’s proven oil reserves. The emirate is also home to the world’s richest family and boasts sovereign wealth funds that manage around $1.5 trillion.
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