CB Richard Ellis reports office rents for so-called "strata" buildings in the Dubai International Financial Centre are down 30 per cent in the past year, which is troubling news for developers such as Union Properties. As banking sector job losses bite Gregor Hunter looks at dropping rental rates. The DIFC is one of Dubai's prime office markets, attracting global financial companies. Goldman Sachs, Barclays Capital and Citibank have leased substantial amounts of space in DIFC this year. The vacancy rate in buildings not controlled by the Government in the DIFC is about 20 per cent, compared with about 45 per cent for Dubai in general, according to Matthew Green, CBRE's head of consultancy. But there is a catch: most of the new buildings coming on line are strata buildings, with multiple owners. CBRE forecasts that 81 per cent of those in Dubai scheduled for completion next year will be strata buildings, with the figure jumping to 95 per cent in 2013. By all accounts, large tenants are reluctant to work with strata projects. There are too many complications dealing with multiple owners. As a result, strata builders are experiencing high vacancy rates, even in the DIFC. The 30 per cent decrease in rents for strata buildings in the DIFC compares with an 18 per cent decline for the overall central business district office market in the past year. And competition for tenants is likely to increase. More than 2.8 million square feet of office space is scheduled to come on line in the DIFC in the next few years, more than doubling the available space, CBRE forecasts. Union Propertieshas been struggling to right itself after opening the 80-storey Index Tower in the DIFC this year. The Foster and Partners-designed tower includes 25 floors of office space. The company was carrying Dh6.4 billion of debt, with Dh2bn due for repayment this year, it said in May. Falling office rates in the DIFC will not help Union's cause. The company's shares closed at 36 fils yesterday, down from a high of 44 fils on April 18.