The Dubai Land Department (DLD) has announced the launch of the pilot phase of the Real Estate Tokenisation Project, which aims to convert traditional properties into digital assets using blockchain technology.
The move opens up new horizons for investors by offering an alternative way of owning property and increasing liquidity in the market.
As part of the project, DLD plans to introduce the tokenisation of property deeds, which will allow a single property to be divided into shares that can be purchased by multiple investors. This solution will not only make the real estate market more accessible to individual and institutional investors but will also contribute to the development of Dubai's digital economy.
Tokenisation is the process of converting property assets into digital tokens, which are recorded on the blockchain. The property owner can divide the property into shares representing a specific value, making it easier to manage the investment.
The key benefits of property tokenisation are;
- Affordability for retail investors - the ability to buy a share in a luxury property without having to buy an entire property.
- Increased liquidity - real estate, traditionally considered a illiquid asset, becomes more flexible to buy and sell.
- Security and transparency - blockchain ensures immutability of records and protects against fraud.
- Automated transactions - the use of smart contracts speeds up the transaction process and reduces administrative costs.
The introduction of real estate tokenisation is part of Dubai's digital transformation strategy, strengthening the emirate's position as a global hub for virtual assets. This market segment is expected to reach AED60 billion ($16.3 billion) by 2033, accounting for approximately % of total real estate transactions in Dubai.
The transformation of real estate into blockchain-based digital assets will simplify and accelerate the process of buying, selling and investing. We will carefully analyse the results of the pilot phase to further improve the project before its full implementation," said Marwan Ahmed Bin Ghalita, Director General of Dubai Land Department.
It is worth noting that the project is supported by the Dubai Virtual Asset Regulatory Authority (VARA) and the Dubai Future Foundation (DFF).
The initiative is also part of the recently launched Real Estate Evolution Strategy (REES) programme, which aims to integrate cutting-edge technology into the real estate sector. While the traditional property market remains a robust investment vehicle, it requires significant capital investment, complex legalities and long-term commitment. Tokenisation, on the other hand, offers a more accessible and flexible model, similar to trading shares or digital assets. Difference from crowdfunding:
- Real estate crowdfunding is a collective investment through digital platforms, offering the opportunity to invest small amounts. However, investors typically do not receive direct ownership rights.
- With real estate tokenisation, investors receive specific ownership rights that are secured on the blockchain, making them full owners of digital assets.
Tokenisation is expected to have a positive impact on the Dubai real estate market. In particular, it will:
- Increased number of investors - the ability to enter the market with less investment will attract new entrants, including young entrepreneurs and investors.
- Increased investment opportunities - there will be more opportunities for portfolio diversification, including owning parts of multiple properties.
- Faster transactions - the use of smart contracts and blockchain will remove bureaucratic delays and reduce transaction times.
- Attracting international capital - Investors from around the world will be able to participate in Dubai's real estate market without the need for a physical presence.
The launch of the Real Estate Tokenisation Project is a revolutionary step for Dubai to digitise the real estate market and create new investment opportunities. Through tokenisation, real estate will become more accessible, transparent and liquid, and Dubai itself will strengthen its position as a global technology and financial hub. If successful, the project could become a new standard for real estate investment, transforming the global real estate industry.