Dubai has a worldwide reputation for being a centre for innovative and high specification commercial property. There are a large number of grandiose commercial properties in Dubai, such as the Burj Khalifa, which stands at a whopping 2,717 ft.
Despite Dubai’s global standing as the premier commercial property destination in the Far East, many companies are struggling to find suitable commercial property space in the region. This is, in the main, due to the myriad of owners of each separate commercial property.
According to Bloomberg, over 40 per cent of office space in Dubai sits empty and it would appear this is a result of joint ownership of commercial property buildings. This viewpoint is backed up by Robin Pugh, of worldwide real estate specialists, Jones Lang LeSalle, who said: ‘For large occupiers, it’s actually quite difficult to find space under single ownership,’ adding that space under multiple ownership is simply ‘not suitable.’
Negotiations with multiple landlords are notoriously difficult and can often be stretched and frustrating, it becomes very difficult to iron differences out with a simple meeting. Ian Albert, regional director at multinational property brokers, Colliers International, believes that even when a majority of a building’s owners agree on rents and terms, it is not uncommon for one to hold out for a better deal, safe in the knowledge that the tenant is eager to complete an agreement. Negotiating can often become a game of poker. Albert said: ‘Corporate occupiers don’t want to deal with multiple landlords…It may have worked for residential towers, but the commercial market doesn’t operate the same way.’
One company which has sought an alternative to negotiating with multiple landlords is Standard Chartered PLC. Having spent the last two years, without success, searching for a commercial property base in Dubai, Standard Chartered PLC have found a unique way around this problem. Standard Chartered got so sick and tired of fruitless negotiations, they decided to build their own commercial property in Dubai, having recently agreed with Gulf Resources Development and Investment LLC to build a 13-story tower, near the Burj Khalifa.
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