Dubai’s real estate market is in the middle of another shift with the latest decree permitting owners in Sheikh Zayed Road and Al Jaddaf to change use rights of buildings to freehold. This pioneering step was launched by the Dubai Land Department as part of the Real Estate 2033 Strategy to enhance property rights and foreign investment. With 457 plots identified for conversion this change is set to redefine property ownership in two of Dubai’s development hubs.

This article seeks to discuss the issue of freehold ownership tenure, its significance, importance and procedures for achieving freehold estates for properties.

What Is Freehold Ownership?

Freehold tenure gives property purchasers a simple fee, that is full ownership of the land and structure perpetually. The owners have every exclusive power to dispose of the property through sale, lease, alteration and otherwise without the interference of the municipal and state laws enacted and provided for. This is different from leasehold tenure in which the property is held for a specified number of years (commonly ninety-nine years) after which the property reverts to the owner or relevant government.

Eligible Areas: Sheikh Zayed Road And The Al Jaddaf

Sheikh Zayed Road and Al Jaddaf both are the strategic locations in Dubai.

• Sheikh Zayed Road

As the main central roadway of Dubai, the Sheikh Zayed Road accommodates many tall rising towers, deluxe flat owners, and business buildings. There is the possibility to increase the leasehold properties here into freehold to increase their market value to attract local as well as international investors.

• Al Jaddaf

Al Jaddaf is a quickly growing neighborhood famous for its rich culture, progressing architecture, and location by the water. With several elaborate residential and commercial projects currently on the pipeline, the change of status to freehold ownership will further enhance the attractiveness of Al Jaddaf to investors.

How To Apply For Transferring Of Leasehold To Freehold?

The process to convert properties into freehold ownership involves a series of steps regulated by the Dubai Land Department:

• Application Submission

The owner of the leasehold property needs to file an application to the Dubai Land Department as an intention to transfer leasehold property to freehold.

• Eligibility Check

The DLD will re-check the admissibility of the property for conversion and the target criteria will be if the property is among the 457 plots.

• Valuation Assessment

The property Conversion Cost which is usually a fraction of the property value, would be ascertained after the property has been evaluated.

• Payment of Fees

After the valuation process, property owners will be required to make transfers to cover the conversion costs according to the DLD.

• Freehold Title Issuance

Once the payment is made a new title deed will be produced to show that the property in question is freehold.

This process has been made deliberately simple so that the process of transfer is convenient for the property owners.

Effect On Dubai Real Estate Market

The decision to allow freehold ownership on Sheikh Zayed Road and at Al Jaddaf will have a large impact on the Dubai real estate market.

• Enhanced Property Values

Freehold building market value is typically higher compared to that of leasehold buildings. Because of this transition, demand boosts property prices in such areas, and investors who own the properties will benefit immensely.

• Foreign Investors In tendency

Leasehold ownership is especially attractive to investors from other countries since it allows the ownership of the freehold as well as secure long-term rights. This initiative is in support of the vision of Dubai to continue to maintain itself as a leading node in real estate investment.

• Boost to Rental Market

Houses located in freehold zones are usually priced considerably higher and their rental returns are considerably high hence the interest among landlords.

• Building the Real Estate Market

The freehold ownership is the latest move among the series of moves that has been taken by Dubai to build up the infrastructure of the Real Estate Sector by increasing the transparency, bettering the laws related to Real Estates and increasing the belief of the investors.

Potential For Property Owners

The conversion of properties to freehold opens up numerous opportunities for property owners:

• Increased Resale Value: The nature of freehold properties attracts superior buyers making it easy for those with properties to sell them at higher prices.
• Better Financing Options: Freehold properties might attract better financing terms from the banks and other related financial institutions.
• Enhanced Investment Returns: The owners can get more rental income with high rental yield and also future capital appreciation.
• Greater Control: As one of the broad classification of interests in property, freehold ownership gives property owners complete freedom to use and alter their properties as they wish.

Challenges And Considerations

While the transition to freehold ownership offers numerous advantages, property owners should consider potential challenges:

• Conversion Costs: Many costs are involved that may include serious charges depending on the market value of the property to be converted to freehold.
• Regulatory Requirements: It is imperative to adhere to a regulating factor known as Dubai Land Department in order to do so.
• Market Dynamics: The governor under section 136 sub-section (1) should investigate the effects the freehold ownership has on the property investment bearing in mind the current market trends.

Getting advice from competent real estate practitioners or lawyers can reduce these challenges.

Why This Move Matters?

The recent permission for free hold in strategic areas such as Sheikh Zayed Road and Al Jaddaf makes this city in UAE very convenient and determined to innovate change in the real estate sector of Dubai. Through transferring full ownership rights to citizens in property ownership, the city is promoting investment and thereby inflows into the economy.

It is evident that this will be good for property owners but also brings a boost to Dubai hosting the best real estate companies in the world. Dubai remains an investor’s paradise for several reasons; its geographical position, modern infrastructure, and enabling environment for businesses.

Things To Consider

The transfer of ownership and full ownership of the buildings located on the Sheikh Zayed Road as well as Al Jaddaf signify a major achievement in Dubai’s real estate development path. It gives property owners a greater set of rights, higher property value, and better property management.