28-01-2025
Dubai real estate: DLD opens freehold property conversion for Sheikh Zayed Road, Al Jaddaf – everything you need to know
In January, the Dubai Land Department (DLD) announced a landmark decision allowing private property owners in key sections of Sheikh Zayed Road and Al Jaddaf to convert their properties to freehold status, opening ownership to all nationalities in a move that could reshape investment opportunities across 457 prime plots in these strategic locations.
The initiative, affecting 128 plots along Dubai's main business corridor and 329 plots in Al Jaddaf, aims to boost property values and attract international investment.
"أراضي دبي" تعلن السماح لأصحاب الملكيات الخاصة في منطقتي شارع الشيخ زايد والجداف بتحويلها إلى تملك حر
— Dubai Media Office (@DXBMediaOffice) January 19, 2025
That said, here is what the decision means for Dubai residents and property owners, and how it aligns with the emirate's ambitious Real Estate Strategy 2033 targeting a market value of AED1 trillion.
Will property prices in Dubai's Sheikh Zayed Road and Al Jaddaf increase?
'Yes, converting to freehold will likely raise property values in Sheikh Zayed Road and Al Jaddaf, as they will become more attractive and competitive due to being freehold,' Toni Abou Jaoude, Sales and Leasing Manager, Betterhomes Local Division told Arabian Business.
Under the new decision, property owners can begin the conversion process immediately through the Dubai REST smart app, followed by a DLD application and property valuation, with a conversion fee set at 30 per cent of the property's value.
However, Jaoude added that the substantial conversion fee is likely to be offset by considerable long-term benefits.
'Freehold properties generally have higher resale value, better rental returns, and appeal to a wider buyer base, including international investors and residents from all nationalities. This opportunity will have a high certainty of attraction towards buyers that were previously limited by leasehold-type plots and properties,' he said.
When asked about the choice of these locations, Jaoude explained that Sheikh Zayed Road and Al Jaddaf are strategic areas renowned for their connectivity, landmarks, and growth potential, making them ideal for driving investments and creating opportunities for expansion.
So, what exactly is the difference between freehold and the old ownership type?
Speaking to Arabian Business, Michael Kortbawi, Partner at BSA Law explained that the primary legal distinction between freehold ownership and the previous ownership model in the UAE lies in the rights available to foreign nationals and the areas accessible to them.
Under freehold ownership, foreign nationals can:
Own property and land outright in designated freehold areas without time restrictions.
Fully exercise rights to sell, lease, or transfer the property, offering greater long-term security and flexibility.
In contrast, the earlier ownership model restricted such rights and did not permit foreign nationals to own plots outright, he said, adding that individuals can still sell their property to anyone following the issuance of a freehold title deed.
Is it wise to convert a property to freehold status?
According to Betterhomes' Jaoude, converting a property to freehold status provides 'full ownership with no time or nationality limits, broader appeal to non-resident buyers and easier mortgage access.'
Moreover, investors looking for secure long-term opportunities, residents seeking full ownership in prime areas and businesses interested in strategic locations are likely show higher interest in these areas following the decision, Jaoude said.
What documents do I need for conversion?
To convert your property to freehold in Dubai, you will, in principle, need the following documents, Kortbawi said:
Original title deed: Proof of your current ownership
Property map: A detailed map or site plan of the property
Owner's identification: Copy of a valid Emirates ID or passport
Ownership agreements: Any contracts or agreements related to the property's original acquisition
Zoning compliance documents: Proof that the property complies with zoning and development regulations, if applicable (This step could be confirmed through DUBAI REST App)
Liability clearance: Evidence that any mortgages, encumbrances, or liens on the property have been resolved (if applicable)
Conversion application form: Completed application form submitted to DLD
Payment receipt: Proof of payment for the 30 per cent conversion fee once the property valuation is completed.
Additional documents required based on the specific property and Dubai Land Department requirements.
'You can change your mind during the conversion process, provided the DLD has not yet finalised the application and issued the freehold title deed. If you decide not to proceed, any partial steps taken (such as valuation assessments) may not be refunded, depending on the stage of the process. If you choose not to convert your property to freehold, your property will retain its current ownership status. This means you will continue to have the same rights and obligations as before, but you will not benefit from the additional rights provided to freehold properties,' Kortbawi explained.
Moreover, converting a plot to freehold in Dubai does not change existing tenants' rights. Current leases remain valid under tenancy laws, and landlords must honour them until they expire unless both parties agree to changes, he said, adding that once converted to freehold, landlords can sell or transfer the property freely. If sold with an active lease, the new owner must uphold its terms until it ends.
Kortbawi also explained that the new title deed issued after converting a property to freehold differs significantly from the old one. It reflects the property's updated status, granting full and perpetual ownership rights without time restrictions, unlike the previous ownership model.
However, the 30 per cent fee for conversion is a fixed percentage of the property's assessed market value, determined by the Dubai Land Department, and cannot be negotiated.
For properties with existing mortgages, Kortbawi said that owners must obtain approval from their lender before proceeding.
'The DLD typically requires a no-objection certificate (NOC) from the mortgage provider. The mortgage terms generally remain unaffected, but the lender may reassess the loan based on the updated freehold status and property valuation,' he said.
Additional costs may also apply, such as administrative fees charged by the DLD for processing the new title deed, valuation fees for determining the property's market value, and NOC fees charged by lenders.
However, the timeline for the conversion status to reflect could range from weeks to month, Betterhomes's Jaoude said, as this depends on 'approvals post access authorisation through Dubai REST app.'
Nevertheless, he said the conversion to freehold attracts global investors, boosting demand and development, and could 'pave the way for other GCC/leasehold areas to convert as an example Jumeirah and Umm Suqeim which is known for its beautiful coasts and high in demand from buyers and tenants for both commercial and residential space.'
'Owners should evaluate the benefits, seek expert advice, and ensure financial readiness for the conversion. This initiative strengthens Dubai's property market, offering owners and investors from all nationalities valuable opportunities. Clear guidelines from the DLD will ensure smooth execution. This is a very exciting process for both sellers and buyers, with opportunities that might be time- and number-limited—catch the train before it leaves the station,' he concluded.
