Dubai launches real estate tokenization pilot to attract investors

Dubai has begun the pilot phase of its real estate tokenisation project, aiming to boost investment in the property sector amid continued market growth. The initiative, announced by the Dubai Land Department (DLD), will convert real estate assets into digital tokens recorded on blockchain technology, simplifying transactions for buying, selling, and investing.

The project enables fractional property ownership, allowing investors to purchase shares in a property rather than buying it outright. This approach lowers barriers to entry, making real estate investments more accessible. The DLD stated that the initiative is designed to attract global technology firms and expand the investor market by facilitating co-ownership through tokenised assets.

Dubai's real estate tokenization market is expected to reach Dh60 billion ($16.33 billion) by 2033, accounting for 7% of total property transactions, according to the DLD.

A booming real estate market

Dubai's property sector continues to experience strong demand, supported by government initiatives such as long-term residency programs and economic diversification efforts. In 2024, real estate transactions in Dubai reached Dh761 billion, marking a 20% increase from the previous year, while the total number of property deals rose 36% to 226,000.

The luxury market has also flourished. Last year, Dubai recorded 435 home sales valued above $10 million, totaling $7 billion in transactions, according to Knight Frank.

Why is tokenization gaining popularity?

Tokenization is increasingly being adopted in real estate, as developers collaborate with technology firms to explore token-based ownership models. By representing property ownership, debt, or equity as blockchain-based tokens, this method increases liquidity, reduces transaction costs, and streamlines administrative processes, according to KPMG.

The blockchain technology underpinning tokenization offers additional advantages, including faster processing times, lower fees, enhanced transparency, and improved security against cyber threats.

Dubai's move toward real estate tokenization aligns with its broader efforts to modernize property transactions, attract foreign investors, and integrate advanced financial technologies into the market.