Dubai real estate tokenisation project will allow for true fractional ownership

Marie Chowdhry and Jessa White of Pinsent Masons were commenting following the recent launch of the Dubai real estate tokenisation project which marks the first time a real estate registration authority in the Middle East has implemented tokenisation on property title deeds, signalling a transformation shift in how real estate assets are bought, sold, and invested in.

The first property launched earlier this week and achieved full subscription in under 24 hours. A total of 224 investors from more than 40 nationalities participated, each contributing an average of AED 10,714 (approx. $2,900). This rapid uptake underscores a growing appetite for innovative real estate investment models, particularly those offering genuine fractional ownership of property title – co-ownership of a single property by multiple investors – through tokenisation, the experts said.

The project is part of Dubai’s broader Real Estate Innovation Initiative (REES) and aligns with the Dubai Real Estate Sector Strategy 2033. This initiative aims to attract global technology firms and open new investment avenues by digitising real estate ownership through blockchain technology.

Real estate tokenisation involves converting physical property assets into digital tokens recorded on a blockchain. This model sets out not only to enhance liquidity in the real estate market, but also to lower the barrier to entry for smaller investors. Blockchain technology ensures that all transactions are securely recorded and easily auditable, reducing the risk of fraud and enhancing investor confidence. Additionally, the ability to fractionalise ownership democratises access to high-value real estate assets, enabling a broader range of investors to participate in the market.

White said: “We are currently seeing the regulatory framework and technology align in real time with the Dubai Land Department, VARA and the Dubai Future Foundation’s collaboration to tokenise property title deeds to allow for true fractional ownership. From a legal and regulatory perspective, this raises important questions around property ownership rights, transferability and investor protection in tokenised property.”

The Dubai Land Department anticipates that the tokenisation sector could reach a market value of AED 60 million by 2033, accounting for around 7% of Dubai’s total real estate transactions.

“Balancing innovation with legal certainly will be key to unlocking the full potential of tokenised real estate ownership,” said Chowdhry.