DLD aims at reviving hospitality sector and real estate with new fractional ownership initiative

Industry experts have lauded the decision of the DLD (Dubai Land Department) to pilot its revolutionary fractional title deed concept of ownership for drawing smaller investors in higher numbers for the hotel apartment category. Announced by the Registration and Service Sector at the DLD, this move emphasizes on division of one unit into two or even four fractional shares, each with its own title deed for mortgage/sale/transfer. 

Smaller investors can become co-owners of various properties at lower financial costs and with greater flexibility, making the segment more accessible for almost all kinds of investors. Registration can be done in anyones name for fractional title deeds as per DLD regulations. With the UAE having managed the pandemic efficiently, current headwinds point at increasing global flights and arrivals along with higher occupancy rates for hotel apartments in the near future. 

Several leading real estate developers are also foraying into offering joint ownership plans for hotel apartments. Several global and local investors will lap up the chance to own high-quality hotel apartments with attractive rental returns, appreciation of capital and property management solutions from developers. This move will enable real estate brokers to sell luxury and posh locations to bigger audiences while investors with tighter budgets can still earn higher returns at the same time. 

Dubai Tourism has already stated that leading players in the hospitality sector are reconsidering and changing their business models for maintaining their market position in a rapidly evolving travel and tourism sector. Demand has increased for global flights since June this year and arrivals are set to exponentially go up in Dubai over the next few months. Hotel apartments are already coming up with promotional offers for residents in the meantime. 

CEO at Square Yards, Tanuj Shori, stated that there are immense benefits resulting from real estate fractionalization which will pave the foundation for building supremely transactional, vast and liquid markets for catering to interests in real estate. He added that this bold initiative fundamentally transforms perceptions of the real estate industry. Shori also added that tremendous value can be unlocked in the future by creating public real estate exchanges. Here, smaller retail investors can easily participate with one-click ownership transfers, background settlements and reasonable costs per trade.