Real estate tokenisation transforms real estate assets into digital tokens using blockchain technology
Dubai Land Department (DLD) on Wednesday said it launched the pilot phase of the ‘Real Estate Tokenisation Project’ to implement tokenisation on property title deeds to open new investment opportunities for investors.
DLD said it seeks to diversify property ownership by allowing multiple investors to co-own a single property through tokenised real estate assets.
Real estate tokenisation transforms real estate assets into digital tokens using blockchain technology. Each asset is divided into shares based on an investor’s budget and financial strategy, enabling fractional property ownership.
This approach marks a significant shift by allowing investors to acquire a portion of a property without fully purchasing it, leveraging advanced technology. Unlike crowdfunding, which grants investors access to the real estate market with small investments through digital platforms, tokenisation offers a distinct and more structured model for real estate investment.
Greater liquidity
Farooq Syed, CEO of Springfield Properties, said this would revolutionise the Dubai property market by introducing greater liquidity, accessibility, and efficiency.
“By converting property assets into digital tokens on a blockchain, investors can buy and sell fractional ownership in real estate, significantly lowering the capital required to participate in the market. This will also enable a more seamless and transparent transaction process, reducing paperwork and intermediaries,” he said.
“Additionally, blockchain technology ensures secure, immutable records, enhancing trust and reducing fraud risks in property transactions.”
He added that tokenisation will increase the buyer base of Dubai and democratise access to Dubai’s real estate market. “Smaller investors will now be able to buy properties and we will see a more diversified buyer base and bringing more stability. More participants will mean more liquidity, faster transactions and possibly higher volumes of transactions which will further boost the development of Dubai’s real estate market,”
Wissam Breidy, CEO of HRE Development, said tokenisation allows smaller investors to participate in high-value real estate projects. This “inclusivity will diversify the investor base and create a more dynamic market.”
Yogesh Bulchandani, CEO of Sunrise Capital, said tokenisation lowers barriers to entry, making real estate accessible to a wider pool.
Rohit Bachani, co-founder of Merlin Real Estate, added that this democratises the market, allowing more investors to get involved in Dubai’s premium properties without the need for significant upfront capital.
“Investors can now diversify their portfolios with ease and benefit from enhanced liquidity through tokenised transactions. It’s an innovative way to bridge the gap between traditional real estate investment and the evolving tech-driven market, aligning with our mission to bring the finest luxury real estate experiences to lifestyle enthusiasts,” he said.
Bachani elaborated that tokenisation allows smaller investors to invest in high-value properties in Dubai, from branded residences to luxury waterfront living and cityscape views. “This opens up the market to a wider range of investors, ultimately enriching the ecosystem with more depth and diversity while enhancing the investment opportunities across various segments.”
Dh60-billion market
The project will strengthen Dubai’s position as a regional and global hub for virtual assets, enhancing its competitiveness on both local and international levels.
DLD anticipated that this groundbreaking initiative would drive significant growth in the real estate tokenisation sector, with its market value projected to reach Dh60 billion by 2033, representing seven per cent of Dubai’s total real estate transactions.
“By converting real estate assets into digital tokens recorded on blockchain technology, tokenisation simplifies and enhances buying, selling, and investment processes,” said Marwan Ahmed Bin Ghalita, Director General of Dubai Land Department.
“Following this year’s pilot launch, we will thoroughly assess the outcomes and leverage key insights to refine the project ahead of its full-scale implementation.”
He added that this project is part of the recently launched ‘REES’ Real Estate Innovation Initiative to attract diverse technology firms.
The project is being implemented in collaboration with the Dubai Virtual Assets Regulatory Authority (VARA) and Dubai Future Foundation (DFF) through SandBox Real Estate.
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Re-Blogged via Khaleej Times
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