The new initiative is aimed at attracting investment into hotel or serviced apartment projects in Dubai.
The Dubai Land Department (DLD) is set to implement a ‘fractional title deed’ concept across the emirate in a bid to attract small investors to the hotel apartment segment, Khaleej Times has learnt.
The new initiative, recently announced by the DLD’s Registration and Service Sector, is aimed at attracting investment into hotel or serviced apartment projects in Dubai, one of the best cities for tourism and lifestyle.
A fractional title deed refers to the division of the same unit into two or four fractional shares, each having its own title deed that may be sold, mortgaged, or transferred as would any other property.
“The initiative is currently in its pilot phase for one project, and we look forward to have more projects like these following the initiative’s full implementation,” a DLD spokesperson said.
“Abreast of the growing number of Dubai investors, especially smaller investors, the fractional deed offers them the opportunity to become co-owners of properties by only investing a portion of the value. This reduces the financial cost on investors entering the real estate market by granting them flexibility to invest within their budgets,” the spokesperson added.
“Such a ticket-size investment will be affordable for all types of investors. As per the DLD’s laws and guidelines of property registration, a fractional title deed may be registered under anyone’s name.”
Dubai’s hospitality sector is among its prime revenue drivers, as tourism attracts huge business for the nation. Hospitality, which also includes leading players such as Emaar, Damac and Nakheel, is currently adapting various strategies to stay competitive.
Industry stakeholders said the UAE implemented a robust strategy to manage the pandemic with the key priority being to safeguard the health and wellbeing of citizens, residents and visitors, who started arriving from July 7, a development that will boost the tourism sector’s road to recovery and increase the occupancy of hotel apartments.
“Joint ownership of hotel apartments is an amazing concept for Dubai as it is one of most visited cities in the world and that’s the reason it is working very well here. This concept is becoming a trend as we have seen some of the big developers in Dubai offering joint ownership in their hotel apartments,” Babar Ali, CEO of Home Smith Estate Brokers, told Khaleej Times.
“Mainly, local and international investors are always grabbing these opportunities as this concept offers amazing benefits ,which include high-quality finishes, high rental return on investment, expected capital appreciation and carefree property management from the developer.”
Farooq Syed, CEO of Springfield Real Estate, said such bold initiative will revive the market, helping it to overcome the impact of the coronavirus outbreak.
“I believe joint ownership will bring a much-needed boost in demand in the hospitality sector. We need such innovative initiatives to revive the market especially post-Covid,” Syed said.
He said joint ownership in the hospitality sector will also allow investors with smaller budgets to earn high returns, and brokers will be able to market high-end locations to a much larger audience.
“Dubai has always been on the forefront of innovation thanks to the leadership of the city and I believe we will be amongst the first cities to bounce back post-Covid,” he added.
Meanwhile, Dubai Tourism said hospitality players are being forced to quickly rethink their business models in order to maintain their position in this fast-changing travel landscape.
Since the beginning of June, the demand for global flights continues to grow resulting in increased seat numbers.
According to OAG Aviation Worldwide, global carriers added 8.2 million seats, which is the biggest increase in seat capacity since the outbreak.
Mirroring the upward trend in global seat capacity, there is a noticeable positive demand for visiting Dubai in the next three months. Hotel apartments are offering promotions to residents to boost the business.