Dubai is pioneering a new era for property investment by embracing real estate tokenization, a model that uses blockchain technology to allow properties to be bought and sold in fractional digital shares. This initiative is being tested through platforms like PRYPCO MINT, developed in partnership with the Dubai Land Department (DLD), to lower the entry barrier for global investors into the city’s thriving real estate market.
The model divides completed properties into hundreds of tokenized units, with some shares selling for as little as $545. This move aims to democratize access to a market where assets typically sell for millions, attracting a much broader pool of capital.
A New Secondary Market For Liquidity
A key benefit of tokenization is the potential to create a dynamic secondary market, enhancing liquidity in an traditionally illiquid asset class. This allows investors to trade property shares with greater ease and speed compared to conventional transactions.
“Tokenisation would create a secondary market in parallel to the traditional market where the barrier to entry is significantly reduced, settlement times are instant, there would be greater transparency and lead to real time price discovery,” explained Cathal Kenny, Director of Valuation Advisory at CBRE MENA.
Stephen Flanagan, Regional Partner at Knight Frank MENA, added, “From a liquidity perspective, blockchain-based platforms can support secondary trading of tokens, offering investors a clearer exit route compared to traditional property transactions, which are typically slower and more capital intensive.”
This continuous trading could lead to more efficient price discovery, moving the market away from reliance on historical comparables. “The cumulative effect should be a more efficient market where pricing reflects real-time supply and demand dynamics,” noted Fadi Moussalli, Executive Director at JLL.
Redefining Property Valuation
While increased liquidity is a major advantage, experts caution that fractional ownership introduces new valuation dynamics and potential volatility. The shift from appraisal-based valuations to market-based valuations driven by frequent trading could amplify short-term price movements.
“We’re essentially shifting from an appraisal-based valuation to a market-based valuation,” said Kenny, acknowledging that this could increase price volatility.
Hassan Alladin, Associate Director at Cavendish Maxwell, echoed this sentiment. “From a valuation perspective, fractional ownership introduces new risks, particularly increased volatility and speculative trading, which are less common in traditional real estate markets,” he said. “There is also a risk that retail participation encourages equity-style trading behaviour in what is fundamentally a long-term, income-generating asset.”
However, many believe the long-term fundamentals of real estate will anchor prices. Kashif Ansari, Group CEO of Juwai IQI, stated, “I expect most tokenised property investors will behave like long-term yield holders. Tokenised real estate is fundamentally different from cryptocurrency because prices are anchored by rents, vacancy rates, and cap rates.”
Democratizing Access For Global Investors
The primary impact of tokenization is expected to be the expansion of Dubai’s investor base. By significantly lowering the capital required for entry, the model opens the market to smaller investors worldwide who were previously priced out.
“It could increase the pool of potential Chinese investors in Dubai by 15-fold, to about 210 million individuals,” Ansari estimated, highlighting the massive potential.
This new model is seen as complementary to, rather than a replacement for, traditional institutional investment. “Fractional ownership platforms are primarily opening up access to smaller investors, who would not typically compete with institutions for whole assets,” said Flanagan.
The appeal is particularly strong for emerging wealth in digitally advanced economies. “The ability to invest small amounts while still gaining exposure to prime Dubai real estate should be particularly appealing to emerging wealth in India and China, where digital payment adoption is already very high,” Moussalli commented.
The DLD As A Critical Trust Anchor
The direct involvement of the Dubai Land Department is considered the cornerstone of the initiative’s credibility. By providing regulatory backing, the DLD builds confidence and ensures that digital tokens are legally recognized and tied to physical assets.
“Regulatory backing ensures that tokenised assets are fully aligned with existing property ownership frameworks and legal protections,” Flanagan highlighted.
Kenny described the DLD as a “trust anchor” that digitizes the actual property title deed, removing the risk of “digital-only” assets that lack real-world standing. “Also, because the DLD controls both the physical land registry and the blockchain pilot, it is impossible for a property to be ‘double-sold’,” he added. This government oversight is critical to assuring investors of the legitimacy and security of their tokenized holdings.
About PRYPCO MINT
PRYPCO MINT is a real-world asset (RWA) tokenization platform for real estate, developed in partnership with the Dubai Land Department (DLD). It enables property owners to convert their real estate assets into digital tokens, allowing for fractional ownership and trading on a secure, blockchain-based platform. The platform aims to increase liquidity, transparency, and accessibility in the Dubai property market.
Source: Zawya
