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Arabian Business
06-04-2025
- Business
- Arabian Business
Dubai boosts tokenisation of real estate investments with landmark partnership
Dubai has taken strides towards the tokenisation of real estate investments as it looks to boost the sector GDP contribution to AED1tn ($272bn) by 2033. Following the launch of the pilot phase of the 'Real Estate Tokenisation,' one of the initiatives under the umbrella of the 'REES Real Estate Innovation Initiative,' Dubai Land Department (DLD) and the Dubai Virtual Assets Regulatory Authority (VARA) signed a collaboration agreement aimed at enhancing Dubai's global position as a leading hub for investment and innovation in the real estate sector. This agreement seeks to improve the regulatory environment related to virtual assets in real estate transactions in line with the strategic directives of the UAE and the vision of its wise leadership to position Dubai as a global hub for innovation and investment. Dubai real estate tokenisation This pioneering agreement, the first of its kind on a global scale in linking the real estate registry with property tokenisation through a governance system that enhances market liquidity and improves the efficiency of property management companies, was signed in the presence of Marwan bin Ghalita, Director General of the Dubai Land Department, and Helal Al Marri, Director General of the Dubai Department of Economy and Tourism. The agreement was also signed by Majid Al Marri, Executive Director of the Real Estate Registration Sector at DLD, and Matthew White, CEO of VARA. The agreement aims to enhance legal frameworks and regulations to keep pace with future developments, ensuring investor rights and compliance with evolving requirements in Dubai's investment and real estate landscape. Additionally, it focuses on increasing investment opportunities and streamlining access to Dubai's real estate market for small investors, thereby contributing to the growth and sustainability of the sector. This initiative aligns with Dubai's commitment to fostering an advanced investment environment, ensuring regulatory compliance, and safeguarding investor rights under DLD's jurisdiction in collaboration with VARA. The collaboration is expected to play a significant role in achieving the objectives of Dubai's real estate strategy 2033 and the broader Dubai Economic Agenda (D33). The agreement aligns with D33's goal of doubling Dubai's GDP over the next decade, with the real estate sector contributing to reaching AED1tn ($272bn) in transactions, growing by 70 per cent in value. As Dubai experiences increasing demand for innovative real estate solutions, this agreement serves as a framework for coordinating efforts between DLD and VARA to strengthen Dubai's position as a premier investment destination. It will also facilitate pilot projects that assess and manage risks while enabling the integration of virtual assets into the real estate sector to maximise economic benefits. The agreement also emphasises enhancing digital infrastructure in the real estate sector to meet investor needs. It includes initiatives to increase awareness and understanding of virtual asset regulations while ensuring alignment with global best practices for consumer protection and investment security. Additionally, the collaboration encourages cooperation with technology companies interested in contributing to the development of Dubai's real estate sector through virtual asset integration. Helal Almarri, DG of DET and DWTCA said: 'This partnership reflects the future-focused innovation that is Dubai's DNA – guided by our leadership, it is engrained in the way regulatory and legislative policy makers enable the next stage of economic growth. 'Real Estate and Virtual Assets are key pillars of the D33 Economic Agenda D33 and by joining forces DLD and VARA will be creating the blueprint for RE 2.0 in a Decentralised Future Economy. 'This Collaboration Agreement seeks to champion a future-ready model that can allow for more inclusive economic participation, with legal safeguards to recognise fractionalised ownership rights. 'Beyond assuring market integrity, we see the provision of regulatory clarity as foundational to unlocking sustainable opportunities for GDP expansion – particularly leveraging virtual assets across the full spectrum of Real-World asset sectors.' Marwan bin Ghalita, Director General of the Dubai Land Department, said: 'This agreement marks a strategic step towards leveraging technological advancements to empower the real estate sector. By strengthening collaboration with technology companies, we aim to position Dubai as a global leader in real estate innovation. 'Our partnership with the Dubai Virtual Assets Regulatory Authority aligns with the objectives of the Dubai Real Estate Strategy 2033 and the Dubai Economic Agenda D33, which reinforce Dubai's global leadership in one of the most vital sectors. 'It also supports the priorities of this strategy, particularly in adopting the latest artificial intelligence technologies, enhancing data centralisation, and providing a seamless investment experience that meets the aspirations of investors and companies while contributing to sustainable economic growth.' The collaboration underscores Dubai's commitment to fostering a diverse and advanced investment ecosystem that enhances the competitiveness of the real estate sector.
Arabian Business
12-02-2025
- Business
- Arabian Business
How will real estate perform in the UAE, Saudi Arabia and Kuwait in 2025?
Real estate markets in the UAE, Saudi Arabia and Kuwait are expected to thrive in 2025, according to Kuwait Financial Centre 'Markaz'. In its latest real estate market reports, Markaz provides analysis of market trends in Kuwait, Saudi Arabia, and the UAE for H2 2024, as well as a forward-looking assessment for H1 2025. The reports highlight a positive trajectory for the GCC real estate sector, driven by economic recovery, easing interest rates, and robust government policies. UAE, Saudi and Kuwait real estate reports With macroeconomic indicators pointing towards continued stability, Markaz anticipates sustained growth in the Kuwait, Saudi Arabia, and UAE real estate markets through H1 2025. Lower borrowing costs, ongoing government-backed reforms, and heightened investor participation are expected to reinforce market confidence and drive expansion. The long-term outlook for the GCC real estate sector remains positive, despite short-term fluctuations, presenting compelling opportunities for investment and development. UAE real estate report The UAE real estate market saw record-breaking activity in 2024, with total sales transactions reaching AED457bn ($124.4bn) by mid-November 2024, marking an 11 per cent increase from 2023 and a 72 per cent increase from 2022. Dubai continues to attract international investors, supported by favourable policies such as the Golden Visa program. The UAE's non-oil economy is projected to grow steadily, backed by robust tourism and real estate sectors. Dubai remains a top global destination, with competitive affordability compared to cities such as Hong Kong, Singapore, and London. Attractive rental yields 6.4 per cent in Dubai and 5.8 per cent in Abu Dhabi—continue to draw investors. The UAE's real GDP is projected to grow by 5.1 per cent in 2025, supported by strong expansion in the non-oil sector and a 6.7 per cent rebound in oil GDP. Dubai's real estate sector remains a key driver of this growth, bolstered by the Dubai Real Estate Sector Strategy 2033, which aims to increase total real estate transactions to AED1tn ($227.2bn) by 2033, contribute AED73bn ($20bn) to Dubai's GDP, and expand the emirate's real estate portfolio 20-fold. Additionally, sustained demand for off-plan properties, along with continued expansion in the residential, office, and hospitality segments, is expected to fuel real estate activity through H1 2025. Saudi Arabia real estate report Saudi Arabia's real GDP growth showed signs of recovery in 2024, with quarterly GDP rebounding from -4.3 per cent in Q4 2023 to 2.8 per cent in Q3 2024, reflecting strong momentum in tourism, real estate, and construction. The KSA real estate price index rose by 2.9 per cent year-on-year in Q3 2024, driven by a 1.6 per cent increase in residential land prices and a 6.4 per cent rise in commercial sector values. The commercial real estate segment has particularly benefited from rising demand amid strong non-oil economic growth. Saudi Arabia's fiscal position remains under some pressure, with a projected fiscal deficit of 3.4 per cent of GDP in 2025. The 2025 national budget anticipates a 6.8 per cent decrease in non-tax revenue, primarily attributed to lower oil earnings, potentially resulting from an extension of OPEC+ production cuts. However, the government continues to prioritise large-scale infrastructure and giga projects, reinforcing growth in the real estate sector. The successful bid to host the FIFA World Cup 2034 is expected to drive further expansion, particularly in hospitality, residential, and commercial developments. In 2025, Saudi Arabia's real GDP is projected to grow by 4.6 per cent, supported by a 4.4 per cent expansion in the non-oil sector. Oil GDP is also expected to turn positive, aided by the expected gradual unwinding of OPEC+ production cuts. Given these factors, Saudi Arabia's real estate sector remains in an accelerating phase, with sustained momentum expected in H1 2025 as investor confidence grows and government-led initiatives continue to drive market expansion. Kuwait real estate report Kuwait's real estate sector continued to recover in 9M 2024, particularly in the investment and commercial segments. Land prices in the Istithmari (investment) segment rose by 3.3 per cent year-on-year as of Q3 2024, reflecting positive investor sentiment, while commercial sector land prices surged by 7.6 per cent over the same period. However, the residential segment continued to face valuation pressures, with land prices declining 3.3 per cent year-on-year in Q3 2024. Meanwhile, rental rates for apartments saw moderate increases, while office rental values remained stable. Looking ahead to 2025, Kuwait's real GDP is expected to grow by 3.3 per cent year-on-year, marking a strong recovery from the -2.7 per cent contraction estimated for 2024. This positive outlook is driven by increased project activity, and expanding credit growth, which are expected to bolster demand for commercial real estate. With macroeconomic indicators signalling continued improvement, the Markaz Real Estate Macro Index score for Kuwait currently stands at 3.5 out of 5.0, indicating sustained market confidence and growth potential. H1 2025 is expected to bring further acceleration, with rebounding land prices and rental rates, supported by ongoing government reforms and an improving economic landscape.
