The Future of Real Estate is Tokenisation

The UAE real estate market is booming, but traditional property investment has barriers—high capital requirements, lack of liquidity, and slow transaction processes.

Enter real estate tokenisation—a revolutionary model that allows properties to be fractionalised into digital tokens on a blockchain, making real estate investment accessible, liquid, and globally tradable.

Why UAE Firms Are Looking at Tokenisation:

• Enables fractional ownership – Sell portions of a property as digital tokens.

• Unlocks liquidity – Investors can buy & sell real estate assets instantly.

• Streamlines transactions – Smart contracts automate transfers & ownership records.

• Expands global investor access – Tokenized assets can be traded internationally.

  
  

BUT: Tokenisation is not just a tech upgrade—it’s a legal challenge.

In the UAE, real estate tokenisation must comply with strict regulations from:

• Dubai Land Department (DLD) – Governs property ownership rules

• Securities and Commodities Authority (SCA) – Regulates security tokens

• Dubai Financial Services Authority (DFSA) – Oversees DIFC-based financial asset

•  ADGM (Abu Dhabi Global Market) – Offers a regulated framework for digital securities

  
  

What is Real Estate Tokenisation?

Real estate tokenisation is the process of converting property ownership into digital tokens on a blockchain. These tokens can represent:

• Fractional ownership (e.g., each token represents a share of the property).

• Equity or debt rights (e.g., investors receive rental income or loan repayments).

•  REIT-like investment structures (e.g., tokenised funds representing property portfolios).

 Why Tokenise?

• Lower entry barriers – Instead of buying an entire property, investors can purchase small stakes.

• Faster transactions – No lengthy paperwork—smart contracts execute ownership transfers instantly.

• Global market access – Attract international investors without geographical limitations.

  
  

UAE Legal & Regulatory Framework for Real Estate Tokenisation

Key UAE Regulatory Authorities & Their Role

1. The Dubai Land Department (DLD) governs property ownership and registration across Dubai. As of March 2025, the DLD has initiated a pilot program for blockchain-based property title deeds, which allows for the conversion of physical titles into digital tokens. The DLD is working closely with the Virtual Assets Regulatory Authority (VARA) and the Dubai Financial Services Authority (DFSA) to refine regulations, full enforceability.

   
   

2. The Securities & Commodities Authority (SCA) is responsible for overseeing security tokens within the UAE mainland. Under SCA regulations, tokenised real estate assets are likely to be classified as securities if they offer investment returns or financial yields to investors.

   
   

3. The Dubai Financial Services Authority (DFSA) regulates security token offerings (STOs) within the Dubai International Financial Centre (DIFC). Any STO launched within the DIFC must comply with DFSA’s dedicated security token framework, which governs issuance, trading, and investor protection standards.

   
   

4. The Abu Dhabi Global Market (ADGM) provides one of the UAE’s most advanced regulatory frameworks for digital securities. ADGM offers a fully regulated structure for the issuance and trading of security tokens, making it the preferred jurisdiction for tokenised asset platforms seeking regulatory certainty.

   
   

What This Means:

• If your tokenised asset offers returns, it must be classified as a security and comply with SCA or DFSA rules.

  
  

• ADGM offers the most comprehensive tokenisation framework but requires strict compliance & licensing.

  
  

How to Tokenise Real Estate in Compliance with UAE Laws

Step 1: Choose the Right Legal Structure

• SPV-Based Tokenisation – Set up a Special Purpose Vehicle (SPV) in ADGM or DIFC to issue property-backed tokens.

• REIT-Backed Tokenisation – Convert real estate into a REIT-like tokenised asset under UAE REIT regulations.

• Debt-Based Tokenisation – Tokenise real estate-backed debt instruments instead of direct ownership.

  
  

Step 2: Secure Regulatory Approval

• approval from SCA if issuing tokenised securities in UAE Mainland.

•  Use ADGM’s regulated environment for security token offerings (STOs).

• Ensure full compliance with UAE real estate & property laws.

  
  

 Step 3: Implement Smart Contracts & Custody Solutions

• Ensure smart contracts reflect legal property rights & obligations.

• Use regulated digital asset custodians for token storage & investor protection.

Step 4: Onboard Investors & Launch the Tokenised Asset

• Use investor KYC/AML verification to meet compliance requirements.

• Launch tokenised real estate offerings through a regulated platform.

  
  

Need Legal Guidance for Tokenising Real Estate in the UAE?

Our firm specialises in:

•  Real estate tokenisation legal structuring in the UAE

• ADGM & DIFC licensing for security token offerings (STOs)

• Ensuring compliance with Dubai Land Department (DLD) regulations