Dubai has recently taken a major step toward redefining property ownership and investment by launching the region’s first government-backed platform for tokenised real estate. Developed by the Dubai Land Department (DLD) in collaboration with the Virtual Assets Regulatory Authority (VARA), the Dubai Future Foundation, and the Central Bank of the UAE – and implemented in partnership with Prypco Mint – the initiative aims to open Dubai’s dynamic real estate market to small-scale investors by leveraging blockchain technology.
Although still in its pilot phase, the project has already attracted considerable attention, with the second property listed on the platform being fully funded in just under two minutes. While participation is currently limited to UAE residents holding a valid Emirates ID, the platform is expected to open to international investors in future stages.
Therefore it is crucial to understand, how exactly real estate tokenisation works – and what legal factors foreign investors and developers should consider as the model continues to evolve.
What Is Tokenised Real Estate?
Real estate tokenisation refers to the process of converting ownership of a physical property into digital tokens recorded on a blockchain. Each token represents a fractional share in the underlying asset, allowing investors to acquire smaller stakes in real estate without purchasing an entire property. This significantly lowers the entry barrier and promotes a more inclusive investment environment. Transactions are recorded on a distributed ledger, ensuring enhanced transparency, traceability, and security. Tokenisation also improves liquidity of real estate assets by enabling token trading on regulated digital platforms.
Regulatory Oversight and Legal Framework
The regulatory structure governing tokenised real estate in Dubai is anchored in a multi-layered legal framework. The DLD remains the primary authority for physical real estate regulation and property registration. Meanwhile, VARA is responsible for overseeing the digital token aspects and the regulation of virtual asset service providers. Since May 2025, VARA has introduced dedicated provisions for the tokenisation of real-world assets. Finally, the Central Bank of the UAE governs compliance with mandatory procedures for all tokenisation transactions.
Market Potential
The market potential is substantial: tokenised real estate is projected to account for up to 7% of Dubai’s property market by 2033, representing approximately AED 60 billion (USD 16 billion) in value. Beyond individual and institutional investors, the emergence of a tokenised property market is expected to attract proptech and fintech startups, as well as virtual asset service providers, to the UAE.
Risks and Legal Considerations
As with any innovative financial model, tokenised real estate entails certain risks. Beyond standard market volatility, a key issue lies in regulatory uncertainty. Given that the initiative remains in its pilot phase, the legal framework governing tokenised assets is still developing. Future regulatory changes may affect investor rights, taxation, resale mechanisms, or platform operations.
To mitigate risk and navigate this evolving landscape, early legal engagement is essential. Due diligence plays a critical role in verifying the enforceability of digital ownership rights, ensuring compliance with current and future regulations, and structuring sound contractual frameworks.
How We Can Help
At Pannike+Partners, our well-experienced legal team offers bespoke advisory services tailored to the needs of private investors, real estate developers, and fintech entrepreneurs with a cross-border nexus. As tokenised real estate trading is elevated to a global stage, we can assist you with practical relevant legal and regulatory advice crucial for sound investment decision making process and investment cycle. Our insights to initial conceptualization, strategic legal and regulatory risk structuring of ownership, exit, and profit-distribution models, and regulatory and licensing guidance under UAE law, will be essential to navigate safely in that quickly evolving investment space.
