Clear Vision
With project delays mounting in Saudi Arabia, the need for clear vision and targets becomes ever more urgent
Scenario 3 – Selling unitized office space:
A commercial office tower was recently completed. The exit strategy for the developer was to sell individual small office space units like typical apartment complexes are sold. As a result, the office spaces are owned by numerous parties. The individual units will generally only attract tenants with small area requirements who have minimal capital for fit out.
If in the future a tenant wants to expand their office space in the same building they need to negotiate with different, and sometimes multiple, owners who may be using different lease contracts, rents, time frames etc. This can be difficult and time consuming. Multinational tenants are generally wary of such ownership structures and are therefore excluded from any potential tenant list.
This leads to the office owners losing out due to higher vacancy levels which also put rents under pressure as individual owners with their own financial requirements set the market rates. The tenants relocate, the office owners/investors will then be wary of future investments as they have poor returns.
