Small investors can now buy into Dubai’s fractional housing market

Dubai’s plan of real estate tokenisation, which I’ve been taking about for a long long time, is now going live and will give small investors access to high-value properties without the need for substantial capital, say industry executives.

On Wednesday, the Dubai Land Department (DLD) launched the pilot phase of the 'Real Estate Tokenisation Project' to implement tokenisation on property title deeds.

“This means investors can access high-value properties without substantial capital, which democratises the market. This will attract a broader pool of investors, including international ones, boosting liquidity and driving growth in Dubai's property market. Additionally, blockchain technology ensures secure transactions while reducing risks,” said Wissam Breidy, CEO of HRE Development.

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“While luxury and high-end properties may initially dominate tokenisation, the benefits will eventually extend to all segments. Affordable housing projects and commercial spaces can also leverage this model, making real estate accessible to a wider audience,” said HRE Development’s chief executive.

Real estate tokenisation transforms real estate assets into digital tokens using blockchain technology. Each asset is then divided into shares – or Fractions - based on an investor’s budget and financial strategy, enabling fractional property ownership.

This allows investors to acquire a portion of a property without purchasing all of it. Unlike crowdfunding, which grants investors access to the real estate market with small investments through digital platforms, tokenisation offers a distinct and more structured model for real estate investment.

DLD said the aim of the project is to diversify property ownership by allowing multiple investors to co-own a single property through tokenised real estate assets.

Breidy added that converting property assets into digital tokens enhances transparency.

Rohit Bachani, co-founder of Merlin Real Estate, said the benefits of tokenisation are broad and can positively impact multiple segments of the Dubai property market.

“While the luxury sector, including branded residences, villas, and waterfront properties, is likely to see strong demand for tokenised investments, this innovation can also benefit other areas like short-term rentals and residential properties in emerging neighbourhoods. We are excited to see tokenisation make it easier for investors to explore diversified avenues like villas, townhouses, and high-yield properties in sought-after locations such as Meydan,” added Bachani.

He said the flexibility in payment plans, combined with attractive returns on investment, make this a win for investors across all market segments, creating a more robust and sustainable growth environment.

Industry insiders believe that large-scale property projects will benefit from the tokenisation of real estate in Dubai.

“Commercial real estate, particularly office buildings and retail spaces presents attractive tokenisation opportunities due to stable income generation potential. For developers, tokenisation creates alternative financing channels outside traditional banking, potentially accelerating project completion timelines,” said Yogesh Bulchandani, CEO of Sunrise Capital.

He believes that luxury residential properties will gain an immediate advantage through fractionalisation, potentially alleviating inventory pressures in the high-end market.

Farooq Syed, CEO of Springfield Properties, said all real estate segments stand to benefit, but tokenisation is likely to have the greatest impact on high-value real estate and commercial properties, where large capital requirements have historically limited investor participation.

“Luxury and high-end developments can now attract a broader pool of investors, while commercial real estate could see increased liquidity as businesses and investors gain easier access to fractional ownership,” added Syed.