Dubai's tokenised property revolution reshapes global real estate investing

Khaleej Times

6 days ago

Dubai's real estate market is entering a new era, powered by blockchain and tokenisation, as it emerges as a global hub for digital property investment.
The city's second fully tokenised property sale, completed earlier this month via the Dubai Land Department's (DLD) pilot platform, sold out in under two minutes and drew investors from more than 30 countries — signaling a seismic shift in how the world views access to real estate.
Tokenisation allows physical real estate assets, such as office buildings, residential towers, and mixed-use developments, to be split into digital tokens. These tokens represent fractional ownership and can be traded via blockchain platforms. For individual investors, it offers access to high-value property markets like Dubai without the need for significant capital. For developers, it opens up new capital-raising channels, diversifying investor bases and speeding up transactions.
Dubai's Real Estate Tokenisation Project, launched under the Real Estate Evolution Space (REES) initiative, is spearheaded by the Dubai Land Department in collaboration with the UAE Central Bank, the Virtual Assets Regulatory Authority (VARA), and Dubai Future Foundation. This coordinated push marks a regional first in the Middle East and places Dubai among the world's pioneers in integrating blockchain into mainstream property transactions.
'As global investors seek smarter, more transparent, and agile models, Dubai's bold steps in real estate tokenisation are not only driving its property boom — they are redefining the very mechanics of property ownership for the digital age,' says Jayakrishnan Bhaskar, CEO of Ozon Marketing, a real estate consultancy.
While the technology itself is not new, Dubai's embrace of tokenised real estate is unfolding faster and at greater scale than in most global cities. The success of the pilot project reflects the emirate's ability to pair technological experimentation with pragmatic regulatory frameworks, creating an ecosystem where both retail and institutional capital feel increasingly secure.
According to PP Varghese, head of Professional Services at Cushman & Wakefield Core, 'Dubai's leadership in tokenisation reflects its ability to combine regulatory innovation with strong market fundamentals. As institutional investors assess emerging models, the long-term opportunity lies in delivering professionally managed, transparent platforms that meet both governance standards and global capital expectations.'
Analysts say tokenisation could dramatically increase market participation by lowering barriers to entry. Traditionally, real estate investment in Dubai required large capital outlays, which restricted access primarily to high-net-worth individuals and institutional buyers. Tokenisation now allows everyday investors to acquire fractional stakes in income-generating properties — such as offices in Business Bay or apartments in Downtown — enabling broader participation in one of the world's most dynamic real estate markets.
Data from CBRE and JLL show that Dubai's real estate investment volume has surged over the past 18 months, with over Dh160 billion in transactions recorded in the first five months of 2025 alone. Tokenised offerings, though still small relative to the overall market, are beginning to play a meaningful role in sustaining investor momentum, particularly among younger, tech-savvy international buyers looking for digital-first opportunities with attractive yields.
However, experts caution that tokenisation does not override traditional real estate principles. Asset location, tenant quality, maintenance, and long-term viability remain critical to returns. Tokenisation merely reconfigures ownership structure and access — it does not alter the performance fundamentals of the underlying asset.
Cost structures are also more layered than they appear. Unlike traditional property deals that involve clear broker and registration fees, tokenised investments often come with blockchain-related transaction costs, compliance expenses, and ongoing platform management charges. As platforms evolve, there is growing pressure to streamline these costs to maintain competitiveness and investor confidence.
Another key risk is valuation volatility. Because tokens can be traded in real-time, their prices may fluctuate independently of the actual performance of the physical asset. For example, a commercial tower's value should reflect rental income, occupancy, and lease terms, but in a tokenised structure, it might also be influenced by broader market sentiment, platform liquidity, or speculative trading — posing risks to long-term capital providers.
Still, the benefits are clear. Blockchain-based models offer unmatched transparency, real-time auditing, automated compliance, and operational efficiency — features that increasingly align with the expectations of global investors. Dubai's regulatory willingness to support these models through initiatives like the DLD pilot adds credibility and signals that the city is preparing for a future where hybrid investment structures — part traditional, part digital — will dominate.
Institutional interest is growing. Sovereign-backed developers and property funds in Dubai are reportedly exploring ways to tokenise portions of their portfolios, particularly office buildings, logistics assets, and branded residences that are already professionally managed and income-generating. These entities are better positioned to meet the stringent regulatory and governance demands that institutional investors expect.
As countries across Europe and Asia cautiously experiment with real estate tokenisation, Dubai's early success may offer a blueprint. The city's agile regulatory environment, investor-friendly tax policies, and world-class infrastructure make it a natural testing ground for blockchain-based innovation. With the UAE also rolling out its broader virtual asset framework under VARA, the future of tokenised investment appears well-aligned with the nation's long-term digital economy vision.
Realty pundits believe that tokenisation is unlikely to replace traditional real estate entirely. Instead, it will increasingly complement it — especially in markets like Dubai where global capital, innovation, and infrastructure converge. 'The path forward may lie in hybrid investment structures that combine the best of both worlds: the institutional security of professionally managed assets and the digital ,' they said.