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Dubai: The Vaulting Centre of the Middle East
Ahmed Bin Sulayem, executive chairman at DMCC, talks about how Dubai is taking centre stage in vaulting services
March 3, 2014 11:56 by kippreport
Business decision making revolves around facts, numbers, statistics and calculations; inputs that should lead to specific outputs. What if the line of business itself implies a high level of secrecy that inputs necessary to reach the calculated and fact-based business decision are not necessarily available? The vaulting business, by nature, doesn’t allow an investor to understand the level of demand for vaulting in a specific location, in some cases, the location of a vault itself is unknown; even less information is available on vault capacities or more precise specifications. Thus, the business decision-making process can be speculative and based on best-guess scenarios.
Considering the decision whether the Burj 2020 (the world’s tallest commercial tower under development by DMCC) should be the house for new vaulting facilities is a significant challenge. I’ll focus on exploring the line of thought behind developing additional vaulting capacity in Dubai.
Vaulting services are an important part of the logistics chain for traders, collectors, financial institutions, families and governments. It provides security and peace of mind for traders who run their business on the basis of keeping precious items like money, artefacts, records, precious metals and documents safe. Vaulting is an ancillary service to the trade and storage of valuables but, unlike other services, the development of vaults is often required well in advance of the development of the sector since it is a pre-requisite for many companies when considering to enter the market.
Currently, vaults in Dubai are state-of-the-art and comparable in terms of size, sophistication and security to what is available globally. DMCC’s vaults were built to the highest level of security and, like the vaults that existed underneath the World Trade Centre Building 4 in New York, our vaults are completely detached structures that would withstand even the collapse of the building that houses them. However, vaulting in Dubai has been estimated to be as much as 40 per cent less expensive to main vaulting hubs in Europe, such as London and Zurich. These European hubs have become prime vaulting destinations due to their strong credentials on security, stable environment and trade friendly practices. These centres boast well-developed infrastructure capable of storing valuables and rare artefacts requiring temperature control or other special requirements. Dubai is now a place that resonates with many of the same drivers that supported the development of these cities.
Dubai is one of the largest global centres for valuables trade, being one of the top destinations for gold and diamonds. Moreover, there is a growing numbers of high net worth individuals choosing Dubai as their home and place of business and gradually the Emirate has become a globally significant financial centre. On a broader perspective, the UAE’s cultural development strategies are creating new needs to store art and other valuable items to be exhibited in landmark museums currently under construction. Finally, there is a strong indication that international organisations and foreign Central Banks now view Dubai as a favourable place to store their reserves. The UAE’s foreign policies and diplomacy have clearly had a positive impact on improving trade and foreign relations. All of these factors indicate a probable exponential growth in demand for vaulting services.
Now, the question that poses itself, is it on the cards for Dubai to develop into the vaulting centre of the Middle East in the coming years? What are the best ways in which DMCC can continue to develop infrastructure to best serve this growing market? The answer to these questions may not be clear yet, but there are triggers in the continued development of the economy that may send strong signals for additional infrastructure development. Does DMCC need to add a new vault in its plans for Burj 2020? …we will let the experts and market participants debate and decide.