Dubai : Multi-owned office buildings, known as "strata", mushroomed during the property boom, but it is time to take a fresh look at this trend, according to experts.

"Strata only made sense over the last two years when speculators came in and bought up floors for silly prices and developers made money accordingly," said Richard Foulds, Director of CB Richard Ellis (CBRE) — Abu Dhabi.

The real estate consultancy, specialising in commercial services, has facilitated only one strata deal out of 126 deals over the last five years in the UAE.

"Corporate global clients don't want strata buildings. The truth is that the value of a single asset building is 15 to 30 per cent higher than a strata one."

Holding back

International funds have been holding back buying office assets in Dubai, bemoaning the lack of well-managed buildings with convenient floor space.

A strata building by its multi-ownership nature is more difficult to manage than a single-owned building. Foulds highlights the U-Bora Tower, owned by Midas International Asset Management, from Korea, as the way to go. The company created a fund and from the outset sought a single held office tower.

Its research into the Dubai market led it to use Emirates Towers as a successful base model to its own office tower development, part of a mixed-use scheme.

Midas is not the only developer realising that single-held buildings make more sense. The O-14, for example, also based in Business Bay, is following similar management principles.

CBRE, in charge of managing U-Bora hopes to make the building stand out from the crowd by applying the same management structure one would in global centres, like Singapore and London. This includes understanding prospective tenants needs and let them pay for that they want.

‘Environmental measures'

"We work with landlords to implement environmental measures. Quality international occupiers create asset value and flexible leases during difficult economic times attracting those who come, or are already here looking to consolidate. We will consider rent free months built into longer term leases," Foulds said.

The U-Bora could be a catalyst for change, he hopes, by setting a benchmark which will get international corporations, setting up in the GCC, to do so in Dubai.

"A solution to change the perception of Dubai's office market could be for future developments to follow the same route. The government could enforce compulsory purchase of strata buildings and convert them to a single-held well manage asset and then sell them to the international market. There are opportunities one just needs to rethink what's available," Foulds suggested.