Pioneering Dubai's creative communities: Dr. Amina Al Rustamani [SME Advisor Middle East]
(SME Advisor Middle East Via Acquire Media NewsEdge) Dubai's free zones have been a powerful catalyst in the remarkable story of the emirate that has set new standards of regional business performance and commercial allure. Offering a plethora of preferential trading conditions to both international and local firms alike, they have been hugely popular, and in many cases enjoyed virtually full occupancy. Yet the free zone story continues apace, with the recent addition of the much-vaunted Dubai Design District, better known as 'd3'. The new creative district reconfirms the appeal of a 'purpose-built environment', one that is dedicated to the growth of specific knowledge industries (in d3's case for the design and fashion industry), and it signals that the popularity of free zones remains on an upward trajectory. We spoke to the architect behind the multitude of free zones in Dubai, which have been developed and operated by TECOM Investments – Dr. Amina Al Rustamani, the real estate company's Group CEO. Serving as an influential mentor and business figure, she has been championing the successful growth of Dubai's industry focused free zones for over a decade. Here, she explains why these communities, many of them hotbeds of entrepreneurialism, innovation and creativity, remain at the core of the emirate's appeal as a global centre for business….
Dr. Amina Al Rustamani, Group Chief Executive Officer at TECOM Investments
For anyone looking to start a business or locate a regional office in Dubai, it's very likely that they'd want their new company to tick the following boxes:
1. Guaranteed 100 per cent ownership
2. Tax free status
3. Access to state-of-the-art, industry focused infrastructure
4. The essence of a business community which enables your business to easily interact and network with its peers
5. To be positioned as a "business partner" versus a "lessee"
As a business entity operating in one of TECOM's free zone business parks, you would be able to enjoy all these benefits and many more including security, licensing, government services and postal facilities. Pioneering this development of free zones in the city is TECOM Investments; the umbrella group managing TECOM's free zones – nine business parks under four distinct industry clusters, namely: ICT, Media, Education and Sciences (TECOM also has a Manufacturing cluster but this is not a free zone). However, that's not all. Continuing to foster business growth within different industry sectors and reinforcing its position as a top innovator for purpose-built facilities and creative communities, TECOM recently introduced the Dubai Design District, also known as d3.
We asked the lady leading this real estate 'revolution' – Dr. Amina Al Rustamani, Group Chief Executive Officer at TECOM Investments – to explain the appeal of the free zone concept, TECOM's expansion, the exciting plans for d3, and what's in store for the future…
Congratulations on your role! How do you find this changes your day-to-day working life and your range of responsibilities?
"Thanks. Before I was appointed Group CEO of TECOM Investments in January 2013, I was CEO of TECOM Business Parks, which is a huge part of the company, so my transition has been quite straightforward and well planned. It really helped that I was an internal appointment and already knew the business inside out.
"The main difference in my responsibilities is that I lead the organisation at a corporate level and am now responsible for other investments and businesses under the TECOM Investments umbrella. An example of the change to my role is restructuring the organisation to gear up for the growth seen in the market, and to expand the company's real estate portfolio with a focus on growth."
How do you feel your own exemplary academic background has prepared you for such a senior and influential role?
"My education and background was very important when I was starting out with TECOM and helping Dubai Media City get up and running. More generally, my engineering qualifications and technical knowledge are very helpful when running a world class real estate developer like TECOM with a focus on attracting technology companies or companies that use technology in their core business.
"Leaving qualifications to one side, my philosophy for success revolves around three things: hard work, an unwavering focus, and a never give up attitude in pursuit of excellence and your own personal goals. From my experience, if you stick closely to these concepts, more often than not the result is a positive one."
What do you feel is the most attractive feature about the free zone concept and how does it differ substantially from commercial and industrial sites outside the free zones?
"Dubai's free zones have specific benefits around company ownership and tax, which make them attractive to many businesses – and this also differentiates them from mainland entities. However, with the TECOM business parks in mind, they provide a lot more than that.
"TECOM's free zones are industry focused, which means bespoke infrastructure and facilities are available, such as the 'Sound Stages' in Dubai Studio City. They are also strategically grouped into clusters to create thriving communities where businesses can be in the company of their peers, network, and promote the development of the industry together."
We hear a good amount about d3, tell us a little more about its unique partner proposition and how does it differ from other established free zones?
"I’m glad you’ve heard a lot about it – it's a great new initiative and I’m very proud to be a part of it! Dubai Design District, d3, was launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice- President and Prime Minister of the UAE and Ruler of Dubai, in early June. It's a free zone business park that will be dedicated to fostering the growth of the emirate's design, fashion and luxury industry. It offers businesses, entrepreneurs and individuals a creative community that will be at the heart of the region's design scene, providing a unique gateway between East and West.
"There are currently 10 buildings under construction, which are due for completion in 2015. Once they are finished, d3 will be a purpose-built environment catering to the full value chain of the design, fashion and luxury industry – and all with the vision of creating a world-class creative community that engages, nurtures and promotes local, regional and global design talent.
"d3's facilities will include everything from cutting-edge design institutes to residential, hospitality, retail and office space. It is also in an absolute prime location, close to Mohammed Bin Rashid City, and a short distance from the city's arterial highways and two international airports. The District is in sight of the Creek, Dubai's historic trading epicentre, Burj Khalifa, the world's tallest building, and Dubai Mall, the world's largest shopping complex.
"Once up and running, d3 will be the most connected design, fashion and luxury destination in the world – with Dubai being only eight hours flight time from 90 per cent of the countries in the world.
"Guided by the objectives set out in Dubai Fashion 2020 – a strategic plan to harness the full growth potential of the fashion industry – d3's creative community will support Dubai's goals for a more diversified knowledge economy."
How favourably has d3 been received? What was the inspiration behind the creation of this new zone?
"It has been really well received by the industry, which is fantastic, and just the kind of response we wanted. The fact that key designers and industry figures have rushed to be involved is exciting and adds tremendous momentum to the initiative. Their views are going to be a major influence on our decision making as the free zone community grows. Sheikh Mohammed's Decree establishing a Design & Fashion Council is very important too, as these experts from across the industry will help guide the industry development.
"Why did we launch a free zone focused on this industry? Well, the economics of the project really make sense. The global apparel, accessories and luxury goods market is currently valued at a staggering USD 1.4 trillion. That is a big market by anyone's standards and Dubai is well placed to increase its share, generating jobs and economic growth along the way.
"Research by Bain suggests that the Middle East luxury goods market saw growth of 10 to 15 per cent from 2011 to 2012, establishing the region as the tenth largest luxury goods market in the world. Moreover, the UAE was ranked as the second most attractive emerging market for apparel retailers in A.T Kearney's 2011 Apparel Index. This goes some way to explaining why 85 per cent of the top international brands already have a presence in Dubai, helping the emirate's retail industry generate approximately AED 150 billion per year.
"The retail experience is clearly a major part of the attraction for visiting Dubai – with 40 per cent of luxury goods spending driven by tourists, and the Dubai Mall welcoming a record 65 million visitors in 2012.
"We see an opportunity in this knowledge industry and believe TECOM's experience and success in the past is a major advantage. We also look at this as an opportunity to support and nurture local and regional talent, which over time will help this business park to become a leading destination for Arab talent, creativity and products – as well as being a gateway between East and West for the industry."
How flexible is d3 in terms of offering working space to both startups and large established businesses?
"The d3 project is about a lot more than just fashion. We envisage it becoming a full service community for all design industry related organisations, brands, and supporting enterprises within the value chain; encompassing retail, commercial, residential and leisure.
"Once complete, we'll have a business centre for startups, space for offices of various sizes, residential accommodation and hotels for tourists, as well as land for companies that want a 'build-to-suit' project. We're building a genuine community at d3."
Do you believe there's one particular reason for the overwhelming success of the free zone concept in Dubai?
"Dubai recognised early on that it had far lesser natural resources relative to its neighbours. It needed to forge another way forward. The free zones are the result of a determined effort to diversify and to develop a leading knowledge-based economy underpinned by a larger private sector. They have been very successful and now contribute approximately 30 per cent of Dubai's GDP. "Nowhere is the thriving business nature of Dubai more visible than in TECOM's business parks. These pioneering, industry-focused communities are now home to over 4,500 companies – big and small, local and multinational – and they employ around 70,000 knowledge workers.
"According to a recent World Bank report on the knowledge economy, the UAE has the highest employment growth rate in the MENA region having seen employment reach 3.5 million in 2009 from 1.7 million in 2000 – the year that TECOM's first free zone business park, Dubai Internet City, was established.
"The industry-focused cluster model has worked in Dubai, helping the UAE to become the eighth most competitive nation in the world, so there is more of this approach to come with the launch of d3."
The recent restructuring of TECOM has been called a 'quiet revolution'. How does this restructure better prepare TECOM for the challenges ahead?
"The purpose of the restructuring was twofold. Firstly, to ensure we are focused on our core real estate business of developing and operating business parks; and secondly, so that we enhance internal efficiencies by being better organised. We also want to ensure our leaders within the business are clear on their objectives and empowered to implement initiatives and changes amongst their teams that lead to commercial success.
"These changes are especially important as the Dubai and wider UAE economy picks up momentum. We want to be in the best possible place to capture the growth opportunity."
With the majority of free zones running close to partner capacity, is there a good case for planning a further cluster of media and industry free zones?
"With the introduction of d3, TECOM now has 11 business parks – 10 of which are free zones. During 2012, we had high occupancy rates averaging 95 per cent in Dubai Internet City, Dubai Knowledge Village and Dubai Media City. Our occupancy rates continue to demonstrate superior levels compared to Dubai's average occupancy rate of 69 per cent, which is testament to their attractiveness to businesses as well as the success of TECOM's knowledge cluster model.
"We do still have space, however. International Media Production Zone and Dubai Studio City are part of our Media Cluster, and they are both in great locations near major transport routes. It's also important to highlight that we are offering different products and services in these zones to cater for the demand we have seen from business partners in Dubai Media City. In addition, there are some really good plots of land for sale for investors, which are multi-zoned so can be for residential, commercial or retail; and of course we have additional building space for businesses to rent.
"In terms of creating more industry focused free zones, we will continue to further develop our current clusters. We are also very focused on d3 and the reaction to the launch announcement from the business community has been really positive. We see an opportunity in this space for Dubai and believe TECOM's experience and success in developing industry focused creative free zones over the last 13 years will be a major advantage."
What is your vision for the future development of the free zone concept and how does this align with the larger vision for the future of Dubai?
"The free zones model lies at the heart of Dubai's diversification strategy and will play a key role in the emirate achieving the ambitions set out in Dubai Vision 2020 and Tourism 2020.
"Naturally, the free zones will need to be flexible and adapt to changes in the market, technology and regulations. But, fundamentally, they will remain dedicated to fostering the growth of Dubai's business community, and for TECOM's zones, they will be focused on critical knowledge industries helping to increase the talent pool."
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