Buying property in some parts of the UAE has become out of reach for many people, but there are solutions. One option is to buy a portion of the space instead of the whole thing. This is known as fractional ownership and thanks to technology, it has become cheaper and more transparent. Companies like Stake and SmartCrowd offer investors the chance to buy small stakes in properties from around Dh500. For example, Stake currently has six properties available to invest in, including a one-bedroom apartment in Downtown Dubai, with a projected net yield/income of 5.1 per cent.
Recently, we saw the launch of a new type of fractional property ownership called real estate tokenisation. When you buy a portion of a property, it’s recorded on the blockchain, and you get a digital token to prove ownership. The platform is called Prypco Mint and it’s a collaboration between property company Prypco and the Dubai Land Department (DLD).
Matt Blom, co-founder at Tokinvest, said: “Fractional ownership opens the doors of real estate investing to a broader, more diverse pool of investors. Traditionally, property investment required significant capital and often came with geographic or legal barriers. But with fractional models, especially those powered by blockchain and tokenisation, investors can access high-quality, income-generating assets at a fraction of the cost.”
Prypco Mint’s first listed property — a two-bedroom apartment in Damac Prive Tower in Dubai’s Business Bay — was fully funded within a day. It attracted more than 200 investors from over 40 nationalities, with an average investment of Dh10,714. Following the platform’s strong debut, multiple developers have shown interest in listing their properties. The platform currently has a waiting list of more than 6,000.
How it works
Through the Prypco Mint platform, investors can buy small shares, or fractions, of premium Dubai properties, with a minimum investment of Dh2,000. These shares, which are in the form of digital tokens, can earn returns through both rental income and rising property values. At the moment, the scheme is only open to UAE residents with an Emirates ID, but there are plans
to open it up to international investors in the future.
All transactions are done in UAE dirhams and no cryptocurrency is involved during this trial phase. Investors will get full access to detailed information about the properties, including pricing, risks, and minimum investment amounts.
Toby Young, a Dubai-based digital assets strategist, said: “The scheme is aimed at anyone and everyone assuming they meet the minimum investment criteria. The idea behind fractionalising real estate is to democratise ownership and make assets available to everyone, not just the select few.”
Raising the Stakes
The DLD/Prypco pilot scheme is along the same lines as that of Stake, a private company that was set up in 2021 and which has been at the forefront of fractional property ownership. It allows people to invest as little as Dh500 to own a fraction of a property. It has already funded more than 400 properties worth more than Dh1 billion in transactions.
Rami Tabbara, co-founder and co-CEO at Stake, said that fractional ownership can often be a difficult concept to explain to people. “It’s a new concept for many. People naturally associate real estate with full ownership, large sums of money, and mountains of paperwork. But when we explain it as buying shares in a property, just like you’d buy shares in a company, it starts to make sense.”
On Stake’s app, there are only six properties currently available to invest
in. Why such a low number? “We prioritise quality over quantity. Every property
goes through a strict underwriting process, and only the best listings and the best yielding opportunities make it to Stake,” Tabbara explained.
Returns
Stake’s yearly investment returns average around 10 per cent, but this drops to a projected net yield (after costs have been taken into account) of around 5 per cent a year. Stake said it has been in active discussions with both the DLD and Dubai’s digital assets regulator VARA to align its platform with the new regulatory framework around tokenised real estate.
Tabbara expects his company to participate in the second phase of the pilot programme, which is scheduled to go live in the second half of this year. DLD said $16 billion (Dh58.7 billion) worth of real estate could be digitised by 2033.
What about the DLD/Prypco pilot project’s returns? The first property offered was sold at a discount to attract buyers, which equates to a higher yield.
Returns on future properties will depend on the selling price, usage of the property, and whether it is a short- or long-term rental. “That said, typical net yields are between 6-8 per cent after the aforementioned has been taken into account. I would expect similar new returns, with a few outliers above and below that range,” Young added. Investors also need to bear in mind that there may be a lock-up period for their investment.
Innovation
Dubai is making a name for itself as a leading crypto and blockchain hub, along with being a pioneer of real-world asset (RWA) tokenisation of property. The Prypco and DLD property platform means that a young professional in Dubai can invest in a prime villa or luxury apartment without the complexity or cost of full ownership. “This isn’t just innovation for innovation’s sake. It’s a structural shift in how wealth can be built and shared,” added Tokinvest’s Blom. “Fractional investment creates liquidity, flexibility, and access, which have been barriers in traditional real estate investing. With lower entry points, more people can participate, which in turn leads to (hopefully) increased capital flow into the sector.”
The launch of the government-backed real estate tokenisation project and the success of platforms like Stake show the huge demand for this type of innovative property ownership. But as more properties are bought up by companies for fractional ownership, it could lead to higher prices in the property market.
“It’s a valid concern, and one we take seriously. When more capital flows into real estate, demand can increase, which could potentially put upward pressure on prices. But it’s important to look at the bigger picture,” said Blom.
“The goal isn’t to inflate markets, it’s to broaden access and enable more efficient use of property assets. If managed responsibly, tokenisation and fractional investing can help smooth the peaks and valleys of global real estate, not exacerbate them.”
Vanessa Bayma, the founder of CBC Consultancy and Events, has invested in two fractional properties using Stake. Currently, she is getting a 6 per cent return with rental income. “We were interested in crypto investing but found it volatile. And didn’t have enough money to own properties outright,” she explained.
She is interested in making more fractional property investments. “Sometimes people are bedazzled by short-term investments such as crypto or volatile stocks. My father always said that real estate is the safest investment. Granted, we can’t afford to buy full properties, but this style of investment allows us to diversify.”
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