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Tokenized Real Estate

Tokenization is the process of issuing a block chain token that digitally and legally represents a real asset. With tokenized real estate properties, retail investors can obtain access to high quality real estate investments which are usually reserved to wealthy individuals or institutions. They can start with a minimum amount as small as EUR/USD 9,999. They can also diversify their portfolios in a manner that is similar to the method wealthy investors have used for hundreds of years.

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Traditional ownership vs Tokenized ownership

Traditional Ownership

  • Costly, paper-based, and time-consuming processes
  • Almost zero liquidity

Tokenized ownership

  • Digitized and automated processes
  • Immediate peer-to-peer trading and liquidity (premium: 20-30%)
  • Ability to fractionalize/democratize

    -  Reduced ticket size

    -  Increased diversification

  • Access to new types of investors
  • Access to new global infrastructure of investors and secondary liquidity
  • Programmable tokenized shares for automation of cross-border transfers, lock-up periods, dividend payment
  • Smart "functions": custody, DeFi lending, atomic transfer, etc.
  • Increased security by removal of human errors
  • Transparency and traceability

Benefits of tokenized assets

Peer-to-Peer Trading

In terms of new capabilities, tokenization makes it possible to easily support peer-to-peer trading of tokenized securities. Unlisted securities such as real estate properties are generally difficult to trade and often illiquid. This means that investors are accustomed to being locked into these investments for many years. Inexpensive and efficient liquidity for unlisted securities using tokens is a totally new opportunity for investors. We provide exchange-like marketplaces that allow the issuers to provide liquidity to their investors.

Fractionalization

With the ability to fractionalize assets down to very small sizes, it becomes possible and attractive to involve 100 or even 1,000 investors in each project. This in turn makes it possible to reduce the typical minimum ticket size for real estate projects from USD/EUR 100,000 down to perhaps USD/EUR 1,000 or even 100. The exchange automatically handles on-boarding of investors and their purchase of tokens (shares). The exchange also automatically keeps the shareholder register updated in relation to trading activities

Democratization

In the US and Asia, most financing rounds for real estate projects are limited to accredited investors. In Europe, the regulation is more flexible and most EU member states allow fund-raising up to EUR 5m or 8m from retail investors. In any case, with fractionalization it becomes possible to reduce the ticket size and allow retail investors to participate in the financing round.

Global Standards and Interoperability

The standards for tokenized securities and digital assets that we used is ERC-1400. These standards ensure that an investor who purchased a tokenized share in one country can later sell it anywhere else in the world, and an issuer who financed his project with the tokens exchange platform can later have his tokens traded on a licensed security token exchange.

What they say about the tokenization market

World Economic Forum

10% of global GDP on blockchain by 2027

Finyear

Tokenization market CAGR at 59% from 2019-2030

Frankfurt School BC

Europe tokenization $1.5 trillion in 2014

JLL

80% of all investments into real estate in just 60 cities around the globe, meaning that 1000s of areas are underserved.

MIT

93% of real estate is beyond the reach of retail investors.

Better Homes and Gardens

89% of US investors interested in real estate but only 3% has invested.

Example of Tokenized Real Estate Projects

US Commercial Real Estate

US real estate investment and trading platform. For listing of third party projects.

First projects go live in Dec. Project size between $10-50m.Legal units in Wyoming.

South African Real Estate

Real estate developer with own and third-party properties.

First 3 projects planned as a mix of finished and pre-construction projects, between $1-20m, and a mix of commercial and retail.

US Container Houses

Container-based houses in the US. many projects around $200k in size.

Legal units in Wyoming

US Hotel Project

Financing of large hotel acquisition, $80-220m, Hotel is underperformimng.

Consortium with project manager, lawyers and DigiShares for platform.

Many subsequent projects if first is successful.

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