The Dubai Land Department (DLD) has launched the pilot phase of its Real Estate Tokenization Project, becoming the first real estate registry in the Middle East to tokenize property title deeds, according to the Dubai Media Office. Developed with the Virtual Assets Regulatory Authority (VARA) and Dubai Future Foundation through SandBox Real Estate, the initiative enables blockchain-based co-ownership of real estate assets.

The project is expected to drive AED 60 bn in tokenized property transactions by 2033, representing 7% of Dubai’s real estate market, according to the statement. It also aims to democratize property ownership in the emirate and attract new investors, while also attracting more crypto firms to set up shop in the emirate.

SOUND SMART- Real estate tokenization involves converting real estate projects into digital tokens on a blockchain to facilitate fractional ownership and, later, online trading of the assets. The concept is picking up steam in the UAE, where regulators are paving the way for more mainstream use of blockchain and tokenization, and where the real estate sector attracts large amounts of investments every year.

We knew this was coming: In December, Mahmoud Al Burai, a senior adviser at DLD, had said that Dubai’s real estate tokenization project had entered its regulatory sandbox phase.

Tokenization has been gaining traction in the UAE’s property market: Damac Group announced in January plans to tokenize at least USD 1 bn worth of assets in partnership with blockchain startup Mantra. This follows Mantra’s USD 500 mn real estate tokenization agreement with MAG Property Development and its MoU with Zand Bank last June to develop tokenization frameworks. Meanwhile, Binghatti revealed last September that it is exploring real estate tokenization, allowing investors to enter the market with as little as AED 500.

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