Is Dubai seeing the creation of a swank new central business district (CBD) through the formation of the Dubai International Finance Centre (DIFC)?

Many in the local real estate market are betting on this eventuality.

"Unlike other cities all over the world, Dubai does not have a CBD at the moment. In its place are a multitude of scattered nodes around which key sectors operate," said Ronald Hinchey, UAE partner at Cluttons, the UK headquartered property survey and management firm.

"But, with Dubai aspiring to be a truly international destination, there is a need for it to create a CBD comprising trophy buildings of the highest quality.

"The new DIFC, which is being projected as a district of its own, has the potential to fulfill such a requirement. Complementing the existing office node in and around Sheikh Zayed Road, it has all the makings of a CBD.

"What will be unique about it is that DIFC is being created out of a land mass that was totally undeveloped just two years ago. It would be unthinkable to take on such a project in London, New York or Tokyo. At 4.8 million square feet, DIFC has the critical land mass and a fully integrated master plan to develop into Dubai's CBD of the future."

Apart from the commercial component, DIFC will also play host to a mix of leisure and residential projects.

It is not as if Dubai did not have a CBD at all. Back in the early 1970s, one existed around the trading posts in Deira, including the gold and spice souks.

Then the government felt the need to encourage businesses to move in a southerly direction towards Bur Dubai. This saw the development of the World Trade Centre, at one time enjoying the status of the tallest building in the Middle East. Demand was such that it could command a premium lease rate of Dh100 a square foot even in the early 1980s, when it was completed.

It, naturally enough, led to a fresh bout of activity which saw the coming up of the highrises on Sheikh Zayed Road. "WTC was to become a landmark and establish a new node for node for commercial enterprises in Dubai. Then, in the 1980s, a lot of banks and financial services companies located in Deira and Bur Dubai congregated around the Khalid bin Walid Road, so much so that is now referred to as Bank Street," added Hinchey.

At that time, the location was seen as ideal for these companies looking for office space that was not as costly as on the World Trade Centre, but offered good services at competitive rates. Almost simultaneously, a less costly node for office space was created in Garhoud and Zabeel.

Then, in the late 1990s, came the development of the technology free zone, creating a hub for the flourishing IT and media sectors. This has again pushed the city's development in a southern direction.

According to Hinchey, "Now, with the DIFC, Dubai can create not just a top class international financial centre, but a destination by itself."