The activation of secondary trading for approximately 7.8 million real estate tokens on 20 February 2026 represents far more than a technological advancement. It marks a structural evolution in how ownership, liquidity, and property valuation interact within Dubai’s real estate ecosystem.
With the Dubai Land Department transitioning Phase II of its Real Estate Tokenisation Project from pilot testing to regulated deployment, institutional investors, lenders, developers, and valuation professionals must now recalibrate their strategic and analytical frameworks.
A Regulatory Evolution — Not a Digital Asset Experiment
Phase II builds upon the legislative and technical groundwork established during the March 2025 pilot under the REES Real Estate Innovation Initiative. The pilot was developed in collaboration with:
- Virtual Assets Regulatory Authority (VARA) — overseeing digital asset trading platforms and compliance
- Dubai Future Foundation — supporting innovation infrastructure
- Central Bank of the UAE — aligning with national financial and monetary systems
This initiative positioned the Dubai Land Department as the first real estate registration authority in the region to implement title deed tokenisation within a fully regulated structure.
The distinction is critical. Unlike speculative digital token models seen globally, Dubai’s framework anchors each token to a legally registered property title denominated in UAE dirhams. Ownership records remain under DLD authority, while VARA governs platform operations, ensuring compliance consistent with institutional investment mandates.
This is infrastructure-led innovation — not decentralised experimentation.
Implications for Property Valuation in Dubai
The introduction of fractional ownership through regulated tokenisation has significant consequences for property valuation Dubai professionals and financial institutions rely upon.
1. Income Approach & Discount Rate Adjustments
Traditional property valuation models incorporate an illiquidity premium due to the capital-intensive and relatively slow exit nature of real estate. If tokenised secondary markets achieve depth, this premium may compress.
For valuers applying Discounted Cash Flow (DCF) models, enhanced liquidity could warrant adjustments in discount rates — particularly for income-generating commercial and institutional assets.
2. Comparable Evidence Complexity
Tokenised transactions introduce fractional price signals into the market. However, these do not directly equate to whole-asset comparables.
Professionals engaged in property valuation must distinguish between:
- Fractional trading activity
- Underlying asset-level market value
Without careful interpretation under RICS and IVSC standards, there is a risk of mispricing, particularly if token liquidity temporarily distorts perceived demand.
3. Expansion of Highest and Best Use Analysis
Tokenisation potentially broadens capital access to large-scale assets such as institutional-grade commercial buildings, hospitality projects, and mixed-use developments.
This shift may influence feasibility studies, development timelines, and investment modelling, expanding the analytical scope within modern property valuation Dubai assignments.
Capital Strategy and Institutional Repositioning
The Dubai Land Department projects tokenised assets could account for approximately 7% of Dubai’s real estate market by 2033, potentially reaching AED 60 billion.
If realized, tokenisation would introduce a parallel liquidity channel operating alongside traditional transactions.
Institutional Investors & Family Offices
Portfolio management models may evolve to allow partial liquidity events without full asset disposal — altering capital recycling strategies and exit planning.
Banks and Lenders
Credit exposure to tokenised assets requires enhanced valuation reporting that addresses:
- Enforcement mechanics under fractional ownership
- Loan-to-value calibration
- Covenant monitoring complexity
Banks will increasingly depend on robust, defensible property valuation Dubai reports that explicitly consider structural nuances.
Developers
Tokenisation could function as a complementary capital-raising mechanism alongside presales and institutional funding. Developers may need to incorporate tokenised funding scenarios into feasibility modelling — analysing cost of capital, investor diversification, and regulatory onboarding timelines.
Risk Variables and Sensitivity Modelling
Transitioning from pilot to operational deployment introduces layered risk factors:
- Liquidity Depth — Secondary markets remain untested at scale. Early trading volumes may not reflect true institutional demand.
- Regulatory Evolution — Future expansion depends on ongoing performance assessments by DLD and VARA.
- Technology & Platform Risk — Smart contracts, cybersecurity, and platform governance introduce new risk dimensions not historically embedded in traditional real estate frameworks.
Asymmetric Valuation Outcomes
Upside Scenario:
Institutional adoption deepens liquidity. Yield compression and pricing efficiency improve market transparency.
Downside Scenario:
Participation remains retail-heavy, and token activity has limited influence on institutional-grade valuation metrics.
Prudent property valuation practice now requires explicit sensitivity analysis covering both trajectories.
Infrastructure Before Scale
Dubai’s measured, evaluation-based rollout aligns with broader strategic frameworks, including:
- Dubai Real Estate Sector Strategy 2033
- UAE Vision 2071
- Dubai Urban Plan 2040
The sequencing is deliberate: regulatory architecture precedes expansion. This enhances long-term stability.
Three Leading Indicators to Monitor
- Secondary market transaction depth
- Approval of additional regulated platforms
- Updated RICS and IVSC guidance on tokenised asset evidence
Early adopters who refine analytical frameworks and establish regulated platform relationships will be strategically positioned as the ecosystem matures.
Institutional Advisory in a Digitally Integrated Market
As ownership structures evolve, the need for independent, RICS-compliant property valuation becomes more critical, not less.
Tokenisation does not simplify valuation; it restructures it.
Navigating the intersection of traditional methodology, enhanced liquidity channels, and regulatory oversight demands technical precision and research-backed insight.
For banks, investors, and developers asking how to apply for property valuation, the process remains grounded in structured documentation, asset analysis, regulatory alignment, and professional standards regardless of whether ownership is recorded conventionally or on-chain.
In a market where capital structures are evolving rapidly, defensible analysis is the ultimate safeguard.
Precision-Derived Decisions.
