‘Residential properties in these areas are likely to see increased demand and value, appealing to expatriates and investors,’ said one expert
Freehold Ownership Unlocks Investment Potential in Sheikh Zayed Road and Al Jaddaf Areas
Property prices along Sheikh Zayed Road (SZR) and in the Al Jaddaf area are expected to rise significantly following the Dubai Land Department’s (DLD) recent decision to allow freehold ownership in these prominent localities. This policy change comes in response to increased demand from both investors and end-users, according to real estate experts.
Commercial Properties Expected to Benefit First
Industry leaders suggest that commercial properties may see the first wave of benefits due to the current shortage of quality office spaces in Dubai. The high demand for office units makes this a lucrative opportunity for investors seeking premium assets.
Details of the Freehold Conversion Policy
DLD announced on Sunday that private property owners in the areas spanning from the Trade Centre Roundabout to the Water Canal on Sheikh Zayed Road and the Al Jaddaf area can now convert their properties to freehold ownership. This move impacts 457 plots—128 on Sheikh Zayed Road and 329 in Al Jaddaf. Property owners must pay a 30% conversion fee based on the property’s gross floor area valuation to complete the process. Once the fee is processed, the owner will receive a freehold title deed and property map.
Boosting Investor Confidence
Farooq Syed, CEO of Springfield Properties, believes that this new policy will significantly drive demand and attract a diverse range of investors to these iconic corridors. He highlighted that the freehold ownership structure creates opportunities for redeveloping older properties and single-owned hotels, enabling them to better align with current market demands.
“The value of properties in these areas is projected to increase by 50%, driven by freehold ownership and redevelopment prospects,” Syed said. He added that the policy would also strengthen rental yields and enhance investor confidence in the market.
Syed cited examples such as villas in Al Wasl District, where property prices surged to over AED 4,500 per sqft after the area transitioned to freehold ownership, compared to nearly half that value when it was a leasehold area.
Increased Demand from Expats and Investors
Alois Kugendran, CEO of Amaya & Co Real Estate, emphasized that the freehold designation will boost property prices and rental values, fueled by heightened demand from expatriates and foreign investors.
Simplified Buying and Selling Processes
Ayman Youssef, Managing Director of Coldwell Banker, stated that the introduction of freehold ownership provides property owners with a streamlined exit strategy, particularly for buildings with large built-up areas. “Historically, selling such buildings was complex, but freehold ownership simplifies the process. The 30% conversion fee adds structure and clarity, making it more appealing to property owners,” Youssef said.
He also estimated that this policy could generate AED 500 million in revenue for Dubai while offering property owners the ability to raise mortgages, thus enhancing their financial flexibility.
A Boon for Residential and Commercial Properties
Youssef added that both residential and commercial property owners stand to benefit significantly. For residential properties, freehold ownership enhances overall value, while on the commercial side, it presents exciting opportunities for investors looking for high-yield assets. Sheikh Zayed Road, with its prime location and proximity to malls, dining destinations, tourist attractions, and healthcare facilities, remains a sought-after area for both residential and commercial investments.
Meanwhile, Al Jaddaf’s growing focus on commercial developments makes this decision a timely boost, stimulating further progress and attracting businesses seeking to establish a foothold in Dubai.
Immediate Impact on Commercial Properties
According to Rohit Bachani, co-founder of Merlin Real Estate, commercial properties along Sheikh Zayed Road may see the earliest benefits of the policy. “Given the current shortage of commercial space, the release of freehold inventory could lead to higher prices and increased demand for A+ office spaces,” he said.
Bachani also noted that while older buildings may experience stable or slightly reduced rents, demand for newer, high-quality buildings will likely push rental prices higher.
A Transformative Policy for the Real Estate Market
Kugendran concluded that freehold ownership provides full property rights, boosts market activity, and enhances property values. Residential properties will attract expatriates and investors seeking full ownership, while Sheikh Zayed Road’s commercial properties will become a hub for international businesses.
This policy positions Sheikh Zayed Road and Al Jaddaf as critical players in Dubai’s real estate market, promising long-term growth and appeal for investors across the globe.
