DIFC firms add more than 1,000 staff during the year of the Arab Spring
Posted on 21 February 2012 with no comments from readers
Companies trading in the Dubai International Financial Centre added more than 1,000 staff last year partly because of transfers from neighboring alternative locations like Bahrain which were hit by the Arab Spring protests.
The DIFC has a working population of 12,000 down from 14,000 three years ago before the global financial crisis. Around three-quarters of the office space owned by third parties in the zone is currently vacant when one million square feet recently completed in the Index Tower, Park Towers and Emirates Financial Towers is added to the year-end total.
Good year
But occupancy in DIFC-owned office space was above 95 per cent at the end of last year, and the number of registered companies was up by seven per cent to 848. Clearly the free zone for international financial services in the heart of downtown Dubai is making progress but still falls short of its peak in 2008.
Officials told journalists at an annual review today that their objective is to double employment numbers over the next five years. But even this ambitious target will leave buildings in the zone empty for years.
Flagship firms taking up more space in 2011 included Citi, Zurich Insurance, Julius Baer and Franklin Templeton International. Upgraded licenses were granted to ICICI Bank, JP Morgan Chase, Morgan Stanley, Nomura and Merrill Lynch.
The DIFC has 21 of the world’s top 30 banks and would like to attract the other nine. Some banks have transferred staff and operations to Dubai from Bahrain because of the ongoing protests in that country but officials are keen to stress the positive attributes of their centre rather than how it has benefited from problems elsewhere.
The centre has an English-language based international regulatory framework unlike Bahrain’s Arabic language legal system based on Sharia law. There is also the tax-free lifestyle of Dubai on offer to attract the best staff, and of course the splendid architecture of the DIFC itself where no expense has been spared.
Empty offices
What will it take to fill up this office space? A revival in the global economy in general and financial sector in particular would help. Banks downsizing do not generally expand overseas unless there are specific opportunities.
Perhaps those will come in another oil boom. The DIFC grew from nothing in the five years of the last boom cycle. It’s certainly going to be offering office space at very competitive rates in global terms and a tax-free haven for its staff in a world of higher and higher taxation.
‘Build and the people will come’ has long been a mantra of Dubai and in time the good folk of the global financial community will discover Dubai.
