Dubai offices lie vacant due to their strata structure

[DUBAI] The Index tower on Dubai's answer to Wall Street has 23 floors of empty offices out of the 25 it opened in 2011. A few hundred feet away, buildings controlled by the Dubai International Financial Centre are almost full.

The difference is ownership. The office space in the Index on Sheikh Zayed Road was sold in pieces to nine different investors under a system known as strata title, according to developer Union Properties, meaning potential tenants face the prospect of having multiple landlords. The DIFC buildings have one owner, making it easier to lease large amounts of space to individual companies.

Offices that were divided into smaller parts to speed up sales and fund development have vacancy rates stuck at levels seen at the height of Dubai's real estate crisis even as homes, malls, hotels rebound. That's unlikely to change unless the government can find a way to persuade multiple owners to act as one on leases, according to Nick Maclean, broker CBRE Group's managing director for the Middle East.