Luxury Real Estate
With multiple STOs already on the docket from a variety of asset classes, Smartlands has just announced a new collaboration, which will, hopefully, see the addition of multiple more. This move sees the UK based company partner with Sotheby’s International Realty.
This collaboration will see the pair explore the feasibility of tokenizing multiple pieces of luxury real estate. The company notes two specific properties as holding the potential for tokenization.
- Greek Islands Villa
- London Penthouse Apartment
While details on the STOs are scarce, for the time being, it is indicated that the Greek Islands Villa is under management by a world renowned hotel network.
This collaboration spurred Smartlands’ Executive Director, Katharine Manderfield, into commenting. She stated that, “Deals of this level of exclusivity will open a new page in asset tokenisation.”
While many are still figuring out their first steps within the world of digital securities, Smartlands remain one of the few companies to have successfully completed an STO. Not only that, but they are now moving on to subsequent opportunities.
Like any experiences, they have the ability to shape our future actions. Expect Smartlands to learn from their past capital generation events, and apply that knowledge to the development discussed here today. The following articles take a brief look at just what these previous successes were.
Due to the nature of real estate, it has caught the attention of various tokenization platforms from more than just the United Kingdom. While there have been hiccups along the way – such as the failure of Fluidity and Propellr – real estate continues to be one of the more lucrative industries, which stands to be transformed by digital securities.
Despite beginning to branch into different sectors, such as commodities and disruptive start-ups, expect for real estate to remain a popular outlet on Smartlands’ path to reaching the goal of tokenizing $1 billion in assets.
Speaking with Arnoldas
Roughly 6 months ago, we were fortunate enough to have completed an exclusive interview with the then CEO of Smartlands, Arnoldas Nauseda. While he has since transitioned into the role of Chairman, our discussion with Arnoldas Nauseda remains relevant today, offering a glimpse into Smartlands operations.
Sotheby’s International Realty
Founded in 1976, Sotheby’s International Realty is a United Kingdom based company. While many associate the name Sotheby exclusively with fine art, there are company branches, such as Sotheby’s International Realty. This branch specializes in facilitating the buying/selling of real estate, with a presence in over 60 countries.
CEO, Philip A. White, currently oversees company operations.
Founded in 2017, Smartlands is a tokenization platform, which operates within the United Kingdom. Through use of the Stellar blockchain, this forward thinking company has developed a variety of solutions built to make fractionalized ownership of real world assets accessible to the masses.
CEO, Ilia Obraztsov, currently oversees company operations.
In Other News
Not content with opportunities based solely in the United Kingdom, Smartlands recently took their first steps towards operating within the United States. These steps were taken by forming an alliance with a U.S. based broker/dealer, bringing support for state-side investors on their platform.
Byte-Sized Investing with Fraxtor
Democratic Investing with Fraxtor
Another company is looking to make their mark on the digital securities sector, as they ramp up operations surrounding their real-estate investment platform.
Naturally, as these types of investments represent ownership in an underlying asset, with an expected positive return over time, the Singaporean government views them as securities. What this means is that participation is restricted to accredited investors only, at this time.
Fraxtor notes a distinction in what separates their projects apart from others. Specifically, the vast majority of real estate based investment opportunities are restricted to developed properties. While these may represent great investments, the ability to gain exposure to such an asset on the ground floor typically proves to be more lucrative in the long run.
The issue with this, however, is that the amount of funds needed to invest in yet-to-be-developed properties is financially prohibitive. The result is that these opportunities are typically restricted to large property developers, not retail investors.
Fraxtor saw this, not as a problem, but as an opportunity to leverage the capabilities of digital securities, bringing the masses access to such investments; essentially democratizing real estate investing.
Representatives from each, Proptech and Fraxtor, took the time to elaborate on the need for their solutions, and how they will work.
Oliver Siah, CEO of Fraxtor, states,
“Investing in premium real estate is often out of reach for the average investor as it requires high capital outlay and is very illiquid. This makes property investment riskier for investors as they are not able to effectively diversify their portfolio. REITs, on the other hand, do not provide the returns that Private Equity Real Estate Funds can achieve. With Fraxtor, I hope to be able to democratize real estate investment…We have placed a digital wrapper around a physical asset which allows us to issued digital securities to our global investors so that they are able to participate in that particular investment.”
Jordan Kostelac, Director of Proptech, states,
“Now everyday investors like you and me can actually own a piece of grade A office tower in the biggest cities in the world. From an asset holder standpoint, it creates new sources of liquidity and allows them to improve that asset or creating yields from that asset by dividing up the ownership. In the same way as companies do in public offering of their equity.”
To date, Singapore has established themselves as one of the leading countries, with regards to acceptance of digital securities. Not only does the Monetary Authority of Singapore (MAS) host a FinTech Sandbox, they have been quite forward thinking with their endorsements towards companies such as iSTOX. Check out the following articles to learn a bit more about a few Singaporean based endeavours.
Operating out of Singapore, Fraxtor was founded in 2017. This young company specializes in bringing real estate based investments to the masses, through the use of blockchain based technologies.
CEO, Oliver Siah, currently oversees company operations.
XIN Group Tokenizes NY Properties – UPRETS
This week, the Chinese-based tokenization platform, UPRETS announced plans to begin tokenization of several condominiums in New York owned by the XIN Group. The news showcases how blockchain technology continues to upend the real estate markets globally. Additionally, it represents a more international approach to real estate liquidity concerns.
In order to accomplish this monumental task, UPRETS formed a strategic partnership with the Xinyuan Real Estate blockchain platform. Together the firms intend to offer investors a stake in the XIN Group’s Oosten Property holdings.
XIN Group – New York Properties
These luxury condominiums are located in Williamsburg, Brooklyn. The units feature a modern floor plan with 2-3 bedrooms per unit. As you would imagine, NY property values are through the roof. Recognizing the growing demand for these properties, XIN Group intends to fractionalize the ownership of these highly sought after units.
Fractional Ownership – UPRETS
Tokenization removes most of the boundaries preventing people from investing in real estate. For one, there is far less paperwork to get approved. Additionally, investors can make micro-investments in order to diversify their holding accordingly.
In this instance, each token will represent a $1 share in the ownership of the properties. In this manner, anyone can begin their real estate investment career. Additionally, these low investment entry levels provide much-needed liquidity to the local real estate markets.
The properties tokenization will take place on the UPRETS permissioned blockchain. This unique and highly functional blockchain is based on X-BOLT consortium chain. Consequently, it provides users with added functionality when compared to other options.
Flexible Blockchain – UPRETS
For example, the UPRETS blockchain design is meant to be flexible. The blockchain can communicate with other blockchains to facilitate a more streamlined payment system. Currently, payment can be made via the Bitcoin blockchain. Notably, developers hope to expand these capabilities to include Ethereum investors in the coming weeks.
This added interoperability allows URT tokens to trade on a wide variety of secondary markets. Consequently, more liquidity is added to the entire investment process with this strategy.
Property Tokenization is on the Rise
The XIN Groups’ advantageous strategy is now the new normal. Every day new property tokenization firms emerge. The benefits provided by these companies are too much to ignore. Tokenization opens local real estate to international investors and streamlines the entire sale process in a way previously unimaginable.
Additionally, Tokenization allows the average person to invest in real estate without putting forth a huge amount of funding. Traditionally, real estate investment takes a considerable amount of cash. Plus there are tons of regulatory and financial hoops one must jump through in order to complete a traditional property sale. Tokenization eliminates a large portion of these requirements.
XIN Group – Moving Forward
The XIN Group is at the forefront of the tokenization revolution. When you consider how desirable a spacious condominium located in New York currently is, it’s easy to see the logic behind choosing these properties. As such, you can expect to see this trend continue until the majority of all real estate sales occur via the blockchain.
RealT Announces Partnership with Uniswap Exchange
The real estate market continues to lead the way in blockchain adoption. This week, the US-based fractional ownership real estate platform, RealT announced a strategic partnership with the crypto exchange Uniswap. The news represents a further expansion of blockchain technology in the United States’ real estate sector. Also, it provides unprecedented levels of liquidity in the market.
RealT is a fully compliant web-based platform that provides global investors with the ability to purchase fractional ownership of US properties. Token holders receive property ownership interests in the form of tokens called RealTokens. Currently, the firm offers properties in Detroit, Michigan with plans to expand nationally in the coming weeks.
RealTokens operate within the Ethereum blockchain as security tokens. These tokens include all compliance and regulatory commitments directly into its programming. ERC-20 compatible security tokens are by far the most widely used in the cryptospace. As such, these tokens have some benefits.
Importantly, as an ERC-20 compatible token, RealTokens enjoy an unprecedented level of interoperability. This added interoperability allows the tokens to enjoy some unique capabilities. These capabilities include the ability to utilize a wide variety of wallet options.
As a RealToken holder, investors gain a host of rights and benefits. These benefits include a share in the property’s rental profits. Additionally, investors gain the opportunity to vote on property decisions such as maintenance, leasing, and liquidation. In the event the property is sold, token holders receive a share in the sale proceeds equal to their percentage of ownership rights in the property.
Importantly, RealTokens allow for trading on the Uniswap exchange. Basically, this popular exchange provides for a seamless trade of any digital asset on the Ethereum blockchain. Importantly, Uniswap retains all of the token’s compliance protocols throughout the life cycle of the token. This ensures that each RealToken follows the current SEC guidelines.
According to company documentation, RealT and Uniswap became the first firms to offer a digital asset representing traditional securities launched on an open finance exchange with this maneuver. This event occurred on Monday, November 4, 2019, when RealT’s flagship property, 9943 Marlowe Street in Detroit, Michigan officially went live on the exchange. Now, investors can instantly buy or sell Marlowe RealTokens using ETH.
Speaking on the decision, the Founders of RealT, the Jacobson Brothers, Remy, and Jean-Marc discussed the importance of the milestone. They noted how the tokenization created a seamless interface and unmatched efficiency in the sector.
Real Estate Goes Blockchain
This latest news is just another example of how blockchain technology revolutionizes the real estate sector. Now, investors can gain fractional ownership of real estate as easy as exchanging Ethereum. Every day more firms turn to tokenization as a valuable strategy to improve liquidity in the market.
RealT and the Future
You can expect to see these types of frictionless transactions continue to expand across the real estate market as blockchain technology continues to proliferate globally. RealT appears to have a game-winning strategy in place for the digitization of the economy.