UAE: Dubai has introduced partial title deeds, allowing investor pools to share ownership of real estate.
It is anticipated the move will help with the buying and selling of property as it allows an individual investor to sell his or her share and not be bound whether other investors agree or not.
Each investor in a property will have their rights recognised by the Dubai Land Department. Partial deeds offer the advantage that previously, if someone wanted to sell off his stake, he would have had to pay a four per cent transfer fee on the entire value of the property. Now, under the partial deed structure, “The transfer fee would only be levied on the fraction of the property being sold
The thinking behind the move is said to be is that by extending official recognition through title deeds, more investors will come together to pick up residential units.
The Land Department says the partial deeds will only be extended to hotel/serviced apartments. But industry sources say that it could only be a matter of time before the scope is widened.
“We believe there is a review underway to allow it for other property forms,” said Sameer Lakhani, managing director at Global Capital Partners. “Serviced and hotel apartments are already popular as investments, and the Airbnb effect will make them more popular for short-term rentals. This is what a pool of buyers could cash in on.”
Majid Saqr Al Merri, CEO of Dubai’s Registration and Real Estate Services, said: “A unified system means equal ownership of properties between two to four investors, and will initially be available for hotel facilities. As for registration legislation, we will employ the existing ones.”
said Taimur Khan, associate partner at Knight Frank, said: “In other real estate investment destinations, standard practice instead of partial deeds is for the pool of buyers who come together to set up a company structure, which then acquires the property under its name with the individuals as shareholders of the firm in agreed proportions. Dubai’s testing relatively unchartered waters with partial deeds. For international investors who have to decide between a London, New York or Dubai property, partial ownership may not have many advantages. However, if the plan is to attract investments from broader segments, this may induce demand – albeit it’s likely to be limited.”
For al the latest developments in the MEA market, don’t miss Serviced Apartment Summit MEA, which takes place in Dubai on September 16.
</p
