Dubai is to allow private property owners of all nationalities in the Sheikh Zayed Road and Al Jaddaf areas to convert their ownership to freehold status, in a move aimed at boosting the city's position as a major hub for real estate investment.
A total of 457 plots are eligible for conversion to freehold – 128 on Sheikh Zayed Road, from the Trade Centre roundabout to the Dubai Canal, and 329 plots in Al Jaddaf, Dubai Land Department said on Sunday.
Under freehold ownership, an investor has a direct title of ownership of the property and the land on which it is built.
“The initiative is set to benefit landowners in these areas by enhancing the market value of their properties, particularly for those opting to convert their land to freehold ownership,” the department said. “It is also expected to increase the economic appeal of these locations, paving the way for real estate developments tailored to freehold investors and attracting a new wave of investment to Sheikh Zayed Road and Al Jaddaf.”
The move will drive “significant growth” in Dubai’s real estate sector, reinforcing Dubai’s position as a global economic hub and a “leading destination” for real estate investment, said Marwan Ahmed bin Ghalita, director general of the department.
Analysts say the announcement has wide-reaching implications for foreign investment in Dubai's real estate market.
“This news is huge because it could be the beginning of what I suppose will be the opening up of all areas to be bought by non-locals,” Mario Volpi, head of brokerage at Novvi Properties, told The National.
“Clearly, anyone that currently owns plots or real estate in these locations has effectively now got a boost as prices will obviously be increased over time after this announcement. Real estate is governed by market forces, so as long as there is demand, the prices will increase.”
The initiative will make Dubai “a magnet” for global investors, and is part of the government's plans to boost the overall economy, Mr Volpi added.
The move is expected to stimulate demand for property in Dubai, agreed Declan King, senior partner and group head of real estate at ValuStrat.
It is a “very progressive step” towards opening up prominent Dubai locations to real estate investment by all nationalities, Mr King told The National.
“This has the potential to allow both whole building and individual unit sales to all citizens, in areas that previously could only be owned by UAE and GCC nationals,” Mr King said.
“Opening-up of the area of Sheikh Zayed Road, between World Trade Centre roundabout and the Water Canal, is bound to attract strong buyer demand – especially in the current buoyant property market that Dubai is enjoying.”
The locations on Sheikh Zayed Road between the Trade Centre and Dubai Water Canal, as well as Al Jaddaf on the other side, have added significant new freehold land into the mix, said Matthew Green, head of research at CBRE Mena.
“While many of the plots along Sheikh Zayed Road are already developed out, remaining lands are now likely to attract increased investor interest, offering opportunities to leverage prime locations close to the financial centre and other major demand generators,” he told The National.
"While we await further clarity on the new ruling, including the related fees for freehold conversion, we believe this move will positively boost demand dynamics and ultimately help to stimulate further investments into the Dubai market, by effectively expanding the addressable market for foreign investors."
The total number of real estate transactions in Dubai reached 188,000 with a combined value of Dh625 billion ($170 billion) as of November. This represents a 38 per cent increase in volumes and a 23 per cent rise in values year-on-year basis, according to the government department's data.
The emirates last year also revealed the Dubai Real Estate Sector Strategy 2033, which aims to double the real estate sector’s contribution to Dubai’s GDP to approximately Dh73 billion and increase home ownership rates to 33 per cent in the next decade. It also aims to grow real estate transactions by 70 per cent and raise the market value to Dh1 trillion.
Process to convert ownership
Property owners can check their eligibility for the conversion through the “Dubai REST” app. They must submit an application to the department for land assessment and valuation to proceed with the conversion.
Common area fees and service charges will be determined as per Real Estate Regulatory Authority guidelines. After this, a conversion fee of 30 per cent of the property’s valuation (based on gross floor area) will be applicable.
Once the payment is processed, a map and freehold ownership title deed will be issued for the converted property.
Freehold v leasehold
Freehold ownership means buying a property in a designated area, which allows investors to own the property and the land it is built on forever.
On the other hand, leasehold ownership means that the investor owns the property, but not the land it is built upon, for a period of up to 99 years. After this period, everything goes back to the freeholder.
The Freehold Decree, a property law in Dubai enacted in 2002, allowed foreigners aged 21 and older to buy, sell, lease and rent properties in certain areas of Dubai under freehold ownership.
There are various benefits to freehold ownership, according to Engel and Volkers, a real estate services company.
“The property owner can make desired changes to the property, pass it on to an heir, and decide whether to sell, lease, or stay in the property,” the company said. Other benefits include a long-term residential visa in Dubai and a high return on investment.
“When it comes to freehold property areas in Dubai, studies estimate a 7-10 per cent return on property investment. If you have invested in a freehold property and wait for the right time, you can gain tremendous returns on your investment."
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5pm: Maiden (PA) Dh80,000 1,600m
Winner: Omania, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Conditions (PA) Dh85,000 1,600m
Winner: Brehaan, Richard Mullen, Ana Mendez
6pm: Handicap (TB) Dh100,000 1,600m
Winner: Craving, Connor Beasley, Simon Crisford
6.30pm: The President’s Cup Prep (PA) Dh100,000 2,200m
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THE LOWDOWN
Romeo Akbar Walter
Rating: 2/5 stars
Produced by: Dharma Productions, Azure Entertainment
Directed by: Robby Grewal
Cast: John Abraham, Mouni Roy, Jackie Shroff and Sikandar Kher
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Citizenship-by-investment programmes
United Kingdom
The UK offers three programmes for residency. The UK Overseas Business Representative Visa lets you open an overseas branch office of your existing company in the country at no extra investment. For the UK Tier 1 Innovator Visa, you are required to invest £50,000 (Dh238,000) into a business. You can also get a UK Tier 1 Investor Visa if you invest £2 million, £5m or £10m (the higher the investment, the sooner you obtain your permanent residency).
All UK residency visas get approved in 90 to 120 days and are valid for 3 years. After 3 years, the applicant can apply for extension of another 2 years. Once they have lived in the UK for a minimum of 6 months every year, they are eligible to apply for permanent residency (called Indefinite Leave to Remain). After one year of ILR, the applicant can apply for UK passport.
The Caribbean
Depending on the country, the investment amount starts from $100,000 (Dh367,250) and can go up to $400,000 in real estate. From the date of purchase, it will take between four to five months to receive a passport.
Portugal
The investment amount ranges from €350,000 to €500,000 (Dh1.5m to Dh2.16m) in real estate. From the date of purchase, it will take a maximum of six months to receive a Golden Visa. Applicants can apply for permanent residency after five years and Portuguese citizenship after six years.
“Among European countries with residency programmes, Portugal has been the most popular because it offers the most cost-effective programme to eventually acquire citizenship of the European Union without ever residing in Portugal,” states Veronica Cotdemiey of Citizenship Invest.
Greece
The real estate investment threshold to acquire residency for Greece is €250,000, making it the cheapest real estate residency visa scheme in Europe. You can apply for residency in four months and citizenship after seven years.
Spain
The real estate investment threshold to acquire residency for Spain is €500,000. You can apply for permanent residency after five years and citizenship after 10 years. It is not necessary to live in Spain to retain and renew the residency visa permit.
Cyprus
Cyprus offers the quickest route to citizenship of a European country in only six months. An investment of €2m in real estate is required, making it the highest priced programme in Europe.
Malta
The Malta citizenship by investment programme is lengthy and investors are required to contribute sums as donations to the Maltese government. The applicant must either contribute at least €650,000 to the National Development & Social Fund. Spouses and children are required to contribute €25,000; unmarried children between 18 and 25 and dependent parents must contribute €50,000 each.
The second step is to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 per annum for five years. The third step is to invest at least €150,000 in bonds or shares approved by the Maltese government to be kept for at least five years.
Candidates must commit to a minimum physical presence in Malta before citizenship is granted. While you get residency in two months, you can apply for citizenship after a year.
Egypt
A one-year residency permit can be bought if you purchase property in Egypt worth $100,000. A three-year residency is available for those who invest $200,000 in property, and five years for those who purchase property worth $400,000.
Source: Citizenship Invest and Aqua Properties
Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
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Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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Farage on Muslim Brotherhood
Nigel Farage told Reform's annual conference that the party will proscribe the Muslim Brotherhood if he becomes Prime Minister.
"We will stop dangerous organisations with links to terrorism operating in our country," he said. "Quite why we've been so gutless about this – both Labour and Conservative – I don't know.
“All across the Middle East, countries have banned and proscribed the Muslim Brotherhood as a dangerous organisation. We will do the very same.”
It is 10 years since a ground-breaking report into the Muslim Brotherhood by Sir John Jenkins.
Among the former diplomat's findings was an assessment that “the use of extreme violence in the pursuit of the perfect Islamic society” has “never been institutionally disowned” by the movement.
The prime minister at the time, David Cameron, who commissioned the report, said membership or association with the Muslim Brotherhood was a "possible indicator of extremism" but it would not be banned.
