Investment Corporation of Dubai (ICD), the state's sovereign wealth fund, has partnered with Canadian property manager Brookfield to build a $1 billion development in the heart of the emirate’s financial district, said a report.

The development, ICD Brookfield Place, will come up next to the cluster of Dubai International Financial Centre (DIFC) buildings. It will comprise a 50-storey office tower, hotel and retail outlets, reported the Financial Times.

ICD Brookfield Place is a vote of confidence from the government in continued growth in its financial centre amid increasing competition from neighbouring hubs, including a new free zone in the richer emirate of Abu Dhabi, said the FT report.

The first tenants are expected in 2018, the report added.

Quality office space in prime locations such as the DIFC continues to attract strong demand, especially from multinationals, though a glut of less desirable offices further out weighs on the broader sector, where occupancy is about two-thirds, it stated.

This is the first new construction project in the DIFC since the property crash in 2008, the report added.