The Dubai Land Department (DLD) has unveiled a groundbreaking initiative to allow private property owners in key sections of Sheikh Zayed Road and Al Jaddaf to convert their properties to freehold status. This transformative decision has far-reaching implications for Dubai’s real estate market, owners, residents, and potential investors.
What Does the Freehold Conversion Entail?
This policy affects 457 prime plots across Dubai’s strategic areas—128 on Sheikh Zayed Road and 329 in Al Jaddaf. It allows property owners to offer full, perpetual ownership to buyers, regardless of nationality. Previously, property ownership in these areas was limited by restrictions that prevented outright ownership by foreign nationals. With the new freehold titles, owners can sell, lease, or transfer their properties without time or nationality constraints.
Benefits for Property Owners and Investors
According to Toni Abou Jaoude, Sales and Leasing Manager at Betterhomes, converting a property to freehold status significantly enhances its value, appeal, and marketability. Key benefits include:
- Full Ownership: No time or nationality restrictions.
- Increased Market Value: Freehold properties typically command higher resale values.
- Appeal to Global Investors: Opens the market to international buyers seeking long-term investments.
- Easier Mortgage Access: Financial institutions are more likely to approve mortgages for freehold properties.
Jaoude notes that these changes will likely attract investors seeking secure, long-term opportunities, as well as businesses aiming for strategic locations.
Documents Required for Conversion
To convert a property to freehold status, owners need to prepare several documents:
- Original Title Deed: Proof of current ownership.
- Property Map: A detailed site plan.
- Owner’s Identification: Emirates ID or passport copy.
- Ownership Agreements: Documents related to the original acquisition.
- Zoning Compliance: Proof that the property complies with zoning regulations.
- Liability Clearance: Evidence that any mortgages or liens are resolved.
- Conversion Application Form: Submitted via the Dubai REST smart app.
- Payment Receipt: 30% conversion fee based on the property’s assessed market value.
Additional documents may be required depending on specific property details.
Financial Implications
The 30% conversion fee, based on the property’s market value, is a significant investment. However, experts like Jaoude believe the long-term benefits—higher resale value, better rental yields, and broader buyer appeal—outweigh the initial cost. Other costs may include administrative and valuation fees, as well as lender NOC charges for properties with existing mortgages.
How Tenants Are Affected
The freehold conversion process does not alter existing tenancy agreements. Landlords must honor active leases until they expire. If the property is sold with an active lease, the new owner must also uphold its terms.
Strategic Locations: Sheikh Zayed Road and Al Jaddaf
The focus on Sheikh Zayed Road and Al Jaddaf stems from their connectivity, landmarks, and growth potential. These areas are vital to Dubai’s economic landscape, making them ideal for this initiative. The move aligns with Dubai’s Real Estate Strategy 2033, which aims to achieve a market value of AED 1 trillion.
Steps to Convert to Freehold
- Submit an application through the Dubai REST app.
- Obtain property valuation and pay the 30% conversion fee.
- Complete necessary documentation and approvals.
- Receive the updated title deed reflecting freehold status.
The process may take weeks to months, depending on approvals.
The Broader Impact on Dubai’s Real Estate Market
By converting properties to freehold status, Dubai strengthens its position as a global real estate hub. This initiative is expected to:
- Attract global investors.
- Boost property values in Sheikh Zayed Road and Al Jaddaf.
- Set a precedent for other areas, such as Jumeirah and Umm Suqeim, to follow suit.
Converting to freehold status offers significant opportunities for property owners and investors. However, careful evaluation of financial readiness and expert advice are essential before proceeding. With clear guidelines from the DLD, this initiative promises to enhance Dubai’s real estate market, offering new possibilities for sellers and buyers alike. As Jaoude aptly puts it, “Catch the train before it leaves the station.”
