Categorized | International

Strata Titles Causing Real Estate Problems in Dubai

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In areas with high office space vacancy, business owners normally have little trouble finding a home for their business. In Dubai, the real estate market is anything but normal.

Despite the fact that Dubai has an office vacancy rate that will go beyond fifty percent in the next year, business owners are having a difficult time finding office space in the city. In fact, companies such as Standard Chartered are putting up their own buildings rather than filling the vacancies. On the surface, it would only seem logical that, with so many office vacancies, business would have no trouble finding office space. Furthermore, there would seem to be no need to build your own dedicated building. However, the situation in Dubai is rather unique.

Many of the office buildings in Dubai have multiple owners, usually one per floor. The commercial spaces owned by multiple owners are under strata titles. These strata titles are making these office space vacancies very unattractive, as business owners would rather not deal with multiple entities. Often times, if there are multiple building owners on the title, there are inconsistencies with respect to how the building is managed. Some of the business owners may not agree to a specific rental deal, thus causing costly delays in finalizing agreements.

The problems of one landlord may impact the others, making it difficult to come to terms of important decisions. Furthermore, disagreements between landlords can make the tenants’ situation an utter nightmare.

Unless there is some sort of modifications to the terms of strata titles, Dubai may continue to face troubling times with respect to the commercial real estate market.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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