The decision to allow the conversion of leasehold properties into freehold ownership along Sheikh Zayed Road and Al Jaddaf marks huge progress for the UAE’s real estate sector.
In an already thriving real estate market, expanding opportunities for freehold ownership in the UAE will only increase market activity and investor confidence. Unlike leasehold properties, which come with fixed-term expirations, freehold properties grant indefinite ownership of both land and structures. With many new plots eligible for conversion, this initiative increases property values and provides greater security for investors, making the real estate market even more attractive to foreign buyers.
This change not only secures longer-term value appreciation for existing owners but also attracts investors seeking stability and high returns. With freehold properties historically appreciating more than their leasehold counterparts, investors now have increased opportunities for capital gains, rental income, and strategic property investments.
Growth & Demand in the UAE Real Estate Market
The UAE’s property sector has been experiencing surging demand and rising prices over the last three years particularly, driven by limited supply and growing investor interest.
This freehold conversion policy expansion is set to enhance the profitability of real estate investments, allowing property owners to sell, lease, or develop with fewer restrictions and greater advantages. By moving away from leasehold’s traditional 99-year terms, the real estate landscape is becoming more attractive to investors and businesses looking for long-term estate planning and asset retention.
The introduction of wider freehold ownership opportunities enhances the UAE’s appeal as a destination for international investors and businesses. Beyond individual property owners, businesses and high-net-worth individuals stand to benefit significantly from this change. Being able to eliminate ground and rental costs, securing asset appreciation, and leveraging properties as financial collateral all contribute to the UAE’s growing status as an investment hub. Additionally, freehold ownership provides tax advantages, greater control over assets, and increased business credibility, making it a more compelling option for global investors.
For businesses looking to establish a physical presence in the UAE, the newly designated freehold zones offer greater flexibility in acquiring prime locations for offices, warehouses, or commercial spaces. Businesses can directly own real estate, reducing rental overhead and the potential for asset growth through specific licensing authorities, such as Abu Dhabi Global Market (ADGM) SPV Holding Company or JAFZA Offshore – both are popular avenues for businesses seeking property ownership.
Economic & Sectoral Impact
This change aligns seamlessly with the UAE’s broader economic diversification efforts. Recent residency reforms, a rapidly expanding economy, and the UAE’s increasing global business reputation have already driven foreign interest in real estate.
Freehold is not a new concept in the UAE. Foreign investors have been able to own freehold property in locations across Abu Dhabi since 2019, including Yas Island, Jubail Island, and the majority of the newer developments. These additional plots seek to attract further investment and encourage long-term property ownership. This initiative will increase property transaction values and create sustained revenue opportunities for owners. As the economic benefits become evident, additional areas across the UAE may likely follow suit in extending freehold conversion options. It is a strategic move to create a dynamic, investor-friendly real estate market. With new opportunities emerging, investors and businesses should benefit from this shift in property ownership.
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