FIELD NOTES · PROPTECH
In November 2025, a Saudi title deed was split into digital shares and transferred to several investors on a government blockchain. It was the first time in the Kingdom. Less than a year later, nine licensed platforms are selling fractional property, one offering has passed 500 investors in a single building, and foreigners can now own property in Riyadh and Jeddah under a new law.
So tokenization is no longer a conference topic. It is a working, supervised market. It is also a small one, with rules that are still being written.
This issue covers what tokenization actually is, what Saudi rules allow today, what has been done locally and abroad, and the principles that decide whether a token offering works.
What it is, and what it is not
A token is a digital record of ownership in something that already exists in law. In real estate, that something is usually a company or special-purpose vehicle (SPV) that holds the property, a fund, or a sukuk. The token sits on top of the legal wrapper. It does not replace it.
The process has five steps: set up the vehicle, align with the regulator, issue the tokens, report to holders, and, where rules allow, let tokens change hands.
Two misconceptions are worth killing early. Tokenization is not crypto speculation: the value comes from rent and property value, not from the token. And it is not a legal shortcut. In Saudi Arabia, a token that gives you a share of a property's returns is treated as a security or as a registered property right, and both come with a regulator.
What it does offer is real: smaller tickets, a wider investor base, faster settlement, and automated distributions and record-keeping.
Who regulates it
There are two front doors, and which one you use depends on what the token represents.
The Capital Market Authority (CMA) governs tokens that represent shares in a vehicle, units in a fund or a sukuk. It decides who may invest, what must be disclosed, and who needs a licence. Its FinTech Lab has already let firms test blockchain-based issuance of debt and equity.
The Real Estate General Authority (REGA), with the Real Estate Registry, governs tokens that represent registered fractions of the property itself. Its regulatory sandbox is where Saudi fractional title has been tested.
Others matter at the edges. The Saudi Central Bank (SAMA) covers money flows, custody of investor funds, and any stablecoin settlement. The Ministry of Investment comes into play for foreign investors and joint ventures. The Ministry of Justice still sits behind title.
What is permitted today
Route | Who can invest | Regulator | Status |
|---|---|---|---|
Private placement of shares in a property vehicle | Qualified investors (institutions, high-net-worth individuals) | CMA | Available now under exempt-offer rules |
Tokenized units in a private real estate fund | Qualified investors, through a licensed fund manager | CMA | Available now; done in practice |
Tokenized sukuk | Mainly institutions and qualified investors | CMA | Tested in the FinTech Lab |
Equity crowdfunding into a property company | Retail, with tight per-investor caps | CMA-licensed platforms | Available now |
Fractional title recorded in the Real Estate Registry | Retail, initially Saudis and residents | REGA sandbox | Live on licensed platforms, under supervision |
Public offering of tokens to retail | Everyone | CMA | No dedicated framework yet |
The practical reading is simple. Institutional and qualified-investor tokenization is possible today, through rules that already exist. Retail tokenization is possible only inside the REGA sandbox or under crowdfunding limits. A public tokenized offering to everyone is not yet on the table.
What has actually been done in the Kingdom
The first tokenized deed (November 2025). A property held by the National Housing Company was tokenized and transferred to several investors on the Real Estate Registry, under REGA supervision. The infrastructure was built with SettleMint. It proved that legal title, not just a company share, can be split and recorded on-chain in Saudi Arabia.
Nine licensed platforms (February 2026). REGA confirmed nine companies for tokenization and digital share sales in its sandbox, including Ghanem, Jozo, Sahl and Madak. A second sandbox round with a dedicated fractional ownership track opened the same month. Testing runs for 6 to 24 months before a model can exit to the open market.
The first private-sector tokenized deed (February 2026). Jozo issued a tokenized deed linked to an existing property, through the Registry.
500 investors in one building (April 2026). Ghanem completed a tokenized offering for more than 500 investors in a single property, structured as a sukuk and integrated with the Registry end to end.
Tokenized private funds. On the CMA side, Stake launched three Shariah-compliant private real estate funds in the Kingdom and reports raising more than SAR 135 million, including from investors outside Saudi Arabia.
Developers testing the water. RAFAL announced a pilot with droppRWA in June 2025 to tokenize part of its portfolio, aimed at both Saudi retail and foreign institutions. Results have not been made public.
Alongside this, the law allowing non-Saudis to own property came into force on 22 January 2026. Ownership in Makkah and Madinah stays restricted. That widens the potential investor base for tokenized property, but it does not by itself open token offerings to foreigners.
What the rest of the world learned the hard way
The global record is longer and more mixed. Three cases cover most of the lessons.
St. Regis Aspen, 2018. About US$18 million of a luxury hotel was sold as tokens to accredited investors under US private placement rules, then traded on a regulated venue. It worked because it was treated as an ordinary security, sold to the right investors, with a real exit route.
RealT, from 2019. More than a hundred US rental homes, one company per property, with rent paid to token holders automatically. The lesson there is operational: when distributions and records run on code, serving thousands of small investors becomes cheap.
Harbor, 2019. A well-funded platform tried to tokenize a US$20 million student housing portfolio. The deal never closed. The technology was fine; the investors and the property owners were not ready.
The failures share a pattern. Tokens were issued with no place to sell them, so "liquidity" turned out to be a slogan. Some issuers called securities "utility tokens" and were pursued by regulators. Many asked ordinary investors to manage crypto wallets and private keys, and lost them at sign-up.
The principles behind any tokenization
Strip away the technology and tokenization rests on a few principles. They hold whether the issuer is a developer, a fund manager or a landowner, and whether the asset is one building or a portfolio.
The token follows the law, not the other way round. A token records a legal interest; it does not create one. Define the wrapper first (a share, a fund unit, a sukuk or a registered fraction of title) and the token simply mirrors it.
Classify it honestly. If a token gives a share of a property's returns, it is a security or a registered property right. Calling it a "utility" or "membership" token does not change that, and regulators have shown they will act.
The investor base sets the route. Institutions and qualified investors can be reached today under existing rules. Retail and foreign investors depend on sandbox permissions, crowdfunding caps or rules still to come.
Returns come from the asset. Rent, sale proceeds or sukuk profit are the source of value. A token whose return depends on its own trading price is speculation, not property investment.
Liquidity has to be built. Fractions only trade if there is a venue, a buy-back window or a matched market among approved holders. Without one, a token is as illiquid as the building behind it.
Compliance lives in the code. Eligibility checks, transfer limits and location rules, such as the restrictions in Makkah and Madinah, can be enforced by the token itself. That is one of its real advantages over a paper register.
The technology should be invisible. Investors expect a familiar account, a national ID login and custody handled by a licensed party. Wallets and private keys belong behind the scenes.
Trust is earned in stages. Tokenized markets have opened the same way everywhere: private offers first, then wider access as rules and track records build. Saudi Arabia's path from sandbox to open market follows that pattern.
None of this is new. These are the rules of any property investment, applied to a new way of recording and moving ownership. Tokenization changes the plumbing, not what makes an investment sound.
What to watch
The permanent rulebook. Officials signalled final tokenization rules around mid-2026. What matters is how sandbox platforms move to the open market, and whether rules for trading tokens between holders come with them.
Foreign access to tokens. Non-Saudis can now own property directly. Whether they can hold registry tokens on the same terms is the next question.
Secondary trading. A regulated secondary platform for registry tokens has been described as in development. Until it exists, every token is effectively a long-term hold.
Settlement. Housing officials have talked about stablecoins with the CMA and SAMA. If a regulated riyal settlement rail arrives, cross-border investment gets much faster.
The short version
Saudi Arabia has built the plumbing for tokenized property faster than almost anyone: a registry that records fractions, nine supervised platforms, and real offerings with hundreds of investors. What it has not finished is the rulebook for retail and for trading. Until it does, the offerings that hold up will be the ones that treat a token as what it is: a new record of an old, regulated interest in real property.
— Walid
Sources: Saudi Press Agency (first tokenization), Saudi Press Agency (Registry infrastructure), Saudi Press Agency (second sandbox), Skyline (nine platforms), Ent Arabi (Jozo), Ent Arabi (Ghanem), REGA (non-Saudi ownership), Enterprise, Gulf Business, Pinsent Masons. This is an analysis, not legal or investment advice.
