Some financial institutions are considering moving out of Bahrain, a property executive says.
Companies in Bahrain weigh Dubai office options
Financial institutions in Bahrain are talking about relocating offices amid the continued political turmoil, with Dubai emerging as a likely destination.
"In the last two or three weeks companies have approached us looking to get out," said Ian Albert, the regional director for Colliers International.
Mr Albert said security was the primary concern. Even if its offices are secure, the perception of turmoil can work against a company, he said.
"How do you recruit staff if staff do not feel secure?" Mr Albert asked.
It is still too early for companies to commit to a move, property executives say. Events are unfolding too quickly.
A spokesman for Standard Chartered bank said yesterday the company remained committed to Bahrain.
"As of now, there is no intention to relocate any of our staff," the spokesman said. "However, we are closely watching the situation, our staff security is a priority for us and we will take any necessary action to protect them."
But companies with operations in Bahrain have been among tenants from around the region looking at Dubai office space in recent months, said Blair Hagkull, the chairman of the Mena region for Jones Lang LaSalle.
The company has been dealing with "an unprecedented level of interest in quality buildings in Dubai", Mr Hagkull said.
Dubai has become more affordable, with rents down more than 50 per cent in the past two years in many buildings. Vacancy rates are above 40 per cent, according to Jones Lang LaSalle data
The interest in Dubai was "not reactionary, it's become strategic", Mr Hagkull said.
This was not the first time companies in Bahrain have been forced to deal with political turmoil, Mr Albert said. Shiites clashed with government forces two decades ago.
"Companies saw it in the 1990s, and now they are seeing it again," he said.
Other property companies said they had yet to learn of any migration from Bahrain.
"Things are in such a state of flux, I don't know if anybody has made a decision," said Stefan Burch, the head of strategic consulting for Cluttons, who is based in Bahrain.
Bahrain and Dubai are often rivals when it comes to attracting financial companies.
"It's very likely [institutions looking to move] will migrate here [to Dubai]," said Ahmad Saidali, the vice president of investment and fund advisory for CB Richard Ellis. "Financial institutions tend to deal a lot with each other and they want to be together."
Last week Standard Chartered committed US$140 million (Dh514.2m) towards building a new office tower for staff in downtown Dubai. The bank will occupy eight of the 13 office levels in the building, enough space for 1,250 staff and a trading floor.
"This will trigger momentum that will attract others in the region," Mr Saidali said
While companies had not yet left Bahrain, there had been a flow of people to Dubai from there as well as Libya and Tunisia, said David Quinn, the head of UAE operations for Cushman & Wakefield.
However, some companies may ultimately pull out of the region rather than relocate within the Middle East, he added.
"On the whole the UAE will be a real beneficiary for the relative stability it offers," Mr Quinn said. "But the region as a whole will lose out."