By Dr. René Lohrbach
Managing Partner of German Partners Real Estate
Leading industry analysts anticipate a profound shift in how real estate assets are structured, managed, and accessed. According to Deloitte, more than US$1 trillion in private equity real estate funds could be tokenised by 2035. Simultaneously, tokenised mortgages and real estate-backed debt instruments are projected to reach approximately US$2.4 trillion.
Dubai has recognised this potential early. In 2025, the Dubai Land Department (DLD) launched the emirate’s first official tokenisation platform as part of a strategy to digitise seven percent of the local property market – equivalent to around US$16 billion – by 2033. Initially limited to UAE residents, the platform is expected to open to global investors in the near future.
The initiative operates under the oversight of the UAE Central Bank, the Virtual Assets Regulatory Authority (VARA), and the Dubai Future Foundation’s Real Estate Sandbox – a regulatory and technological framework that underscores Dubai’s commitment to positioning tokenisation as more than a buzzword, but rather a core pillar of future real estate policy.
The private sector is following suit. In early 2025, DAMAC Group signed a landmark agreement to tokenise US$1 billion in real-world assets, further cementing Dubai’s role as a regional hub for blockchain-integrated property transactions.
Benefits: Liquidity, Accessibility, Institutional Reach
Real estate has long been one of the most illiquid asset classes—transactions can take weeks or even months. Tokenisation addresses this by enabling fractional ownership, with digital shares that can be traded on secondary marketplaces. Dubai has even halved property transfer fees for tokenised transactions, making entry smoother and more cost-effective.
But the implications go far beyond efficiency. By lowering the capital barrier, tokenisation opens the market to a new demographic of investors: retail buyers, younger professionals, and globally mobile high-net-worth individuals seeking diversified real estate exposure.
For institutional investors, the appeal lies in the precision and flexibility of programmable assets. Tokens can be structured to represent specific income streams, property segments, institutional frameworks (e. g. ESG-aligned real estate) or risk profiles—comparable to how fixed-income products are managed. The possibility of near-instant secondary trading adds a crucial liquidity layer that has traditionally been absent in real estate.
Risks and Challenges
Despite the promise, tokenised real estate is not without risks. One central concern is the regulatory grey area between property law and securities law. While Dubai links tokens directly to legal title deeds, many jurisdictions lack such clarity—creating legal uncertainty for cross-border investors.
Moreover, while liquidity is a selling point, it’s not guaranteed. Secondary markets need scale to function effectively, and in the early stages, demand may be limited. Platforms like Prypco Mint aim to address this by capping ownership shares and operating internal exchanges—but whether broader liquidity will emerge remains an open question.
Technical risks also persist. Smart contract errors, platform failures, or cybersecurity breaches could disrupt operations or erode investor trust. Though Dubai has partnered with experienced blockchain firms, the supporting infrastructure is still maturing.
Finally, adoption itself is a hurdle. Real estate remains a conservative industry. Broader acceptance will depend on education, regulatory stability, and clear value beyond novelty. Tokenisation must prove it can deliver operational advantages—not just digital flair—to become a lasting feature of global real estate markets.
Ends
Also read: DLD launches region’s first real estate tokenisation platform for fractional ownership
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