By Shane McGinley
Consultancy that helps foreign firms set up in UAE says demand back to pre-crisis levels.
The number of companies looking to set up in UAE freezones has grown in recent months, according to a Dubai-based consultancy firm.
“The market is improving,” George Abraham, marketing manager of Global Resources, a consultancy firm which helps foreign companies set up in UAE freezones.
Abraham reported that last year they were receiving about 300 inquiries a month, but the global downturn has caused a dramatic drop at the start of 2009.
During the summer Abraham said monthly enquiries fell to around 200 but since Ramadan the market had improved and now they were receiving closer to 350 a month.
Approximately four percent of enquiries result in companies being set up in the UAE.
“We have customers coming to form companies. We form about 15 companies a month,” he added.
After Ramadan Abraham said enquiries began to improve and in the last quarter business has grown 15 percent.
Interest has mainly come from within the Middle East, mostly from Saudi Arabia and Kuwait and Qatar.
“People are focusing mainly on the service industry and management consultancy business. Manufacturing companies have also begun to come in again,” he observed.
Of all the freezones in the UAE, Abraham has found that Ras Al Khaimah Free Zone has proved to be the most popular with new companies.
In September, a report from CB Richard Ellis Middle East found that office lease rates in some of Dubai’s freezones have fallen by up to 63 percent.
Set up in 1985, freezones offer benefits including 100 percent repatriation of capital and profits, multi-year leases, and assistance in labour recruitment have seen demand for office space slump during the global crisis.
Following the success of freezones such as TECOM and Jebel Ali resulted in the emergence of new freezones at Dubai International Financial Centre (DIFC), Jumeirah Lake Towers, Dubai Healthcare City and Dubai Silicon Oasis but these are now struggling as demand continues to drop and new units come on to the market, CB Richard Ellis said.
The research company said in the last nine months it had seen “a notable drop in lease rates” for Dubai's freezones.
“Decline has been felt the most in the emerging new freezone areas of Jumeriah Lakes Towers and Dubai Silicon Oasis, which have suffered heavy drop in price since the beginning of this year,” the report added.