Prime areas in Dubai are set to see a new wave of developments with the property market seeing hectic parleys between property owners and real estate companies for joint development of properties, industry players said.
The move follows the recent Dubai Land Department (DLD) initiative allowing private property owners in the Sheikh Zayed Road and Al Jaddaf areas to convert their property ownership status to freehold, coupled with the surge in demand for freehold off-plan properties.
The joint development efforts are expected to open up opportunities for both owners and developers to maximise the market advantage of these properties, offering fresh options for investors from around the world, leading to further firming up of residential prices in the much sought-after areas of the city, industry insiders said.
“Property owners are, of late, increasingly collaborating with real estate companies for joint development, recognising the potential of Dubai’s thriving property market,” Arash Jalili, Founder and CEO of Dubai-based Unique Properties, told Arabian Business.
“With the growing demand for freehold off-plan properties, many landowners are eager to enter this dynamic segment,” he revealed.
Senior executives with other developers and real estate consultancies said the market is seeing a sudden rise of strategic partnerships, with businesses becoming official sales partners for such projects, further enhancing opportunities for investment and development.
Dubai real estate shift
Sector experts said the joint development trend is already emerging in a significant way, fuelled by the surging demand for freehold off-plan properties in Dubai.
They said it is likely that more property owners will explore joint development opportunities to maximise their market advantage.
Jalili said while it is still early to fully assess market dynamics and affordability, Sheikh Zayed Road presents a promising entry point for such joint collaboration projects in terms of pricing, with strong potential for appreciation over time.
“In Al Jaddaf, the current price per sq. ft. ranges between AED 1,400 and AED 1,600. With older buildings being converted into freehold properties, the area is poised for increased investment opportunities and enhanced market accessibility, further strengthening its appeal,” he said.
The Unique Properties’ chief executive said the Dubai Land Department (DLD)’s strategic move to allow the conversion of private property owners in the Sheikh Zayed Road and Al Jaddaf areas into freehold will not only boost the market value for landowners and attract investment in these key areas, but significantly alter the property landscape in such prime city areas.
A total of 457 plots in Sheikh Zayed Road and Al Jaddaf are eligible for conversion into freehold ownership, with 128 plots in Sheikh Zayed Road and 329 plots in Al Jaddaf opening doors to expatriates and foreign investors.
This marks a major shift from the traditional leasehold ownership structure in these high-demand locations.
Industry observers said the provision to convert leasehold properties into freehold has been introduced in response to the growing demand for properties in some of the key locations in the city.
With Dubai’s real estate market experiencing unprecedented growth, this initiative presents a valuable opportunity for UAE nationals to further capitalise on the sector’s strong momentum, they said.
Freehold drives property value
Industry players said Dubai is poised to attract a larger pool of foreign investors with freehold ownership acting as an attractive option for international buyers, particularly expatriates, looking to secure long-term investments in the UAE real estate market.
The initiative is also expected to attract sustained investments, fostering long-term economic growth and boosting real estate transaction volumes in the region, they said.
Jalili said properties with freehold status are typically considered more secure and valuable, as compared to leasehold properties.
“With freehold properties, owners have greater flexibility to manage their investments,” he said, adding that “as a result, property values in both Sheikh Zayed Road and Al Jaddaf could rise significantly, benefitting landowners and driving higher returns on investment.”
The conversion to freehold ownership is expected to significantly enhance the value of a property, as it offers full control to the owner without time constraints.
The Unique Properties’ Founder, however, said the 30 per cent conversion fee based on the property’s gross floor area valuation could be a key challenge for property owners.
“While this fee reflects the property’s value, it may be a financial burden for owners of lower-value properties.
“To mitigate this, the introduction of flexible payment plans, or targeted discounts for specific property types could ease the transition and make the conversion process more accessible,” he said.
Jalili also said while the expansion of freehold ownership has the potential to drive increased demand and influence price trends, particularly in prime locations, measures such as developer incentives or market regulations could be explored to support a balanced growth in these areas.
“Taking a strategic approach would help maintain stability and ensure long-term sustainability in the real estate sector,” he said, adding that as demand for properties increases, there is a risk of an unusual rise in property prices, particularly in premium areas, which could limit access to homeownership for a broader range of potential buyers.
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