Dubai’s Homebuilders Discover Tokens
For a long time, Dubai’s rise as a blockchain hub stood in contrast to its real estate market of steel and concrete. Now, more and more companies are merging these two booming industries.
Written by Gérard Al-Fil, Dubai
When the cryptocurrency Bitcoin reached its all-time high of $111,970 in mid-May, a special kind of deal took place in the Gulf. Dubai’s MultiBank Group and real estate developer MAG entered into a tokenization agreement worth $3 billion with MAG Lifestyle Development and Mavryk, a blockchain innovator. According to a press release from MultiBank, this was «the world’s largest tokenization initiative for real-world assets (RWA).»
A token is a digital unit representing a value or a right recorded on a blockchain, such as the right to own shares or access to physical assets. MultiBank specializes in derivatives trading. MAG is especially known among bankers for its office towers «Emirates Financial Towers» located in the DIFC financial district.
Bricks and Mortar Gold for Crypto Enthusiasts
At the end of May, the Dubai Land Department launched the «world’s first deed for token ownership,» after the first tokenized real estate project was successfully sold on the VARA-licensed platform «Prypco Mint.» VARA is Dubai’s regulatory authority for digital assets, founded in 2022.
Deloitte predicts that by 2035, real estate worth $4 trillion globally will be tokenized. This would correspond to an annual growth rate of 27 percent over a decade.
The token wheel keeps turning. At the beginning of June, Dubai-based consulting firm Nisus Finance and Toyow, a developer of digital assets, signed a memorandum of understanding aimed at issuing tokens for Nisus’ real estate portfolio. According to Nisus, it manages properties in Dubai (3.65 million inhabitants) and India worth $500 million.
End of the Real Estate Bonanza in Sight?
In 2024, total real estate transactions in Dubai totaled $207 billion – twice as much as in Saudi Arabia ($75 billion).
But analysts at Standard and Poor’s have been warning market participants: «The volume of new launches the market has absorbed in this cycle does not appear sustainable in the long term.» As more construction firms enter the emirate, increased due diligence is needed due to the highly competitive investment environment, S&P notes. Prices for premium properties are expected to rise another 5 percent in 2025 before the trend reverses.
Rating agency Fitch also predicts an end to Dubai’s post-pandemic boom, forecasting that in 2025/2026, around 210,000 new units will lead to an excess supply of residential and office space.
