Dubai Launches Pilot Program to Tokenize Real Estate Assets, Targeting 7% Market Share by 2033

The Dubai Land Department (DLD), in collaboration with the Virtual Assets Regulatory Authority (VARA) and the Dubai Future Foundation (DFF), has kicked off the project to convert property title deeds into digital tokens recorded on the blockchain.

Dubai is piloting a program to tokenize its real estate assets, integrating blockchain technology into the property sector, state media WAM reported on Wednesday.

The Dubai Land Department (DLD), in cooperation with the Virtual Assets Regulatory Authority (VARA) and the Dubai Future Foundation (DFF), has launched the project to convert property title deeds into digital tokens that will be recorded on the blockchain.

The DLD estimates that by 2033, tokenized real estate could account for about 7% of Dubai's total property transactions, amounting to a market value of approximately 60 billion dirhams ($16 billion).

How Is This Making Buying Property In Dubai Easier?

The use of blockchain tech could easily improve the processes of buying, selling, and investing in real estate in Dubai. Tokenization allows you to own just a fraction of a property, which could lower the barrier to entry for new investors and increase activity in the market.

It also offers a more defined ownership structure than crowdfunding, where investor funds are combined to acquire property. However, there may be some hurdles to overcome in the real estate sector. According to a McKinsey report on tokenization from last year, real estate may see slower tokenization growth due to operational challenges.

Has Dubai Been Pushing Blockchain Before?

This move to tokenize real estate is the second major step that Dubai has taken recently to become a leader in adopting blockchain solutions.

Just two months ago, in January, Dubai-based developer DAMAC Group partnered with blockchain platform MANTRA to tokenize assets worth at least $1 billion in the Middle East.

DAMAC is a major Dubai developer with holdings in real estate and data centers. Furthermore, it has been investing in data centers globally, so this is sure to have an impact.

As for MANTRA, they had also teamed up with MAG Property Development last year to tokenize $500 million in real estate assets, beginning with a residential project in Dubai, a main hub for Gulf tourism and business.

All in all, it seems clear that the UAE and Dubai want to position themselves as a global digital asset center, which includes the crypto industry as well.