News
APAC embraces real estate tokenization for more inclusive participation, reveals GlobalData
September 2024 by GlobalData
Asia-Pacific (APAC) is experiencing a surge in tokenization projects, particularly in the real estate sector, bringing a significant change in the market. By leveraging blockchain technology to tokenize properties, companies are streamlining the buying and selling process and expanding investment opportunities. This innovative approach is breaking down traditional barriers and making real estate investment more inclusive and accessible, says GlobalData, a leading data and analytics company.
© Norebbo
Vaibhav Gundre, Practice Head of Disruptive Tech at GlobalData, comments: “Tokenization is transforming the traditional real estate market by enhancing liquidity and accessibility. Converting property ownership into digital tokens allows investors of all sizes to participate in the market, lowering the entry barriers. Additionally, this democratization of real estate investment can promote more balanced economic growth by allowing a wider range of investors to participate. It is a significant step towards inclusivity in a market that has traditionally been exclusive.”
Rahul Kumar Singh, Senior Disruptive Tech Analyst at GlobalData, comments: “The push towards tokenization highlights the innovative use of blockchain for buying, selling, and managing real estate. By using smart contracts, transactions are becoming faster, more secure, and less costly. This technological adoption also creates a more resilient market by ensuring transparency, efficiency, and reducing fraud. This simplifies buying and selling, allows fractional ownership, increases market liquidity, and broadens access to real estate investments.”
An analysis by GlobalData’s News Database reveals highlights the rise of real estate tokenization projects in APAC.
In July 2024, Kenedix, SMBC Trust Bank, Nomura Securities, and BOOSTRY launched Japan’s first real estate security token offering under the Kolet brand, representing beneficiary rights for 462 smart rental homes. This blockchain-based initiative aims to enhance accessibility and transparency in property investments, with Kenedix planning a significant expansion of its tokenized real estate portfolio by 2030.
In March 2024, Sumitomo Mitsui Finance and Leasing Company Limited (SMFL) initiated a pilot real estate tokenization project with US-based Vertalo. This project integrates blockchain with SMFL’s asset tracking platform, AssetForce, enhancing data accuracy and security in real estate transactions.
In September 2023, Singapore’s regulated tokenization platform, ADDX, announced plans to expand into the Middle East and North Africa (MENA) region. Since its inception in 2017, it raised a total funding of $140 million from major Asian financial institutions such as SGX and SET to facilitate blockchain-based fundraising for pre-initial public offer (IPO) companies and boost investment flows between the APAC and MENA markets.
Singh concludes: “Real estate tokenization in Japan is increasingly focused on innovation and sustainability. As this area develops, it is expected to bring greater investment, liquidity, and efficiency. However, there are challenges, particularly with regulatory compliance and security. Addressing these will require cooperation between industry players and regulators to develop a secure, standardized framework. Overcoming these barriers is key to fully realizing the benefits of tokenization in the real estate market.”
