Sunday, January 29, 2023
  • About Us
  • Events
  • Advertise
  • Contact
  • Login
  • Register
No Result
View All Result
The Wealth Today
  • Investments
  • Wealth Management
  • Technology
  • People
    • New Leaders
  • Impact Investing
  • Partner Content
  • Risk & Compliance
  • Exclusives
The Wealth Today
No Result
View All Result
Home Digital Transformation

Why Tokens will Transform the Way We Invest in Real Estate?

The Wealth Today by The Wealth Today
December 15, 2021
in Digital Transformation, Investment, Real Estate
real-estate
Share on FacebookShare on Twitter

By Waleed Rassuli, Head of Tezos Gulf

Nearly two decades have passed since the Dubai government issued a decree that allowed expatriates and foreigners to own freehold property in the Emirates.

But ask anyone what the market was like back in 2002, and they will tell you stories about investors waiting for hours, cheque books in hand, to buy their dream home in a city of abundant potential.

The visionary regulation created a multi-billion dollar sector that saw local developers jumping at the chance to cash in on new investment and fill the skyline with more cranes than anywhere in the world —all to build projects that put our tiny desert state on the world map.

Today, another new regulation is set to dramatically disrupt Dubai’s real estate industry and perhaps forever change how we invest in the real estate market.

Democratizing real estate investment

In October, the Dubai Financial Services Authority (DFSA) launched a comprehensive and innovative framework to regulate security tokens. The approach was designed to capture a range of activities relating to digital assets.

The Investment Tokens regulatory framework applies to persons or entities interested to market, issue, trade or hold investment tokens in or from the Dubai International Financial Centre. This also includes authorized firms wishing to undertake financial services relating to investment tokens, such as dealing in, advising on, or arranging transactions relating to investment tokens, or managing discretionary portfolios or collective funds investing in tokens.[1]

Of course, the benefits of tokenization in real estate are massive.

Traditionally fixed, illiquid assets such as real estate can be divided into multiple tokens, fractionalizing the asset to offer investment opportunities to demographics who cannot afford to buy large assets on their own – a move that could truly democratize access to property ownership while improving market liquidity.

Partial investment in real estate is not a new concept. However, digital investment tokens have drawn scrutiny and mistrust due to regulatory ambiguity. Currently, anyone can issue tokens without clear and enforceable accountability because token creators are not regulated financial institutions.

The concern remains that a token might not even have a legal document linking it to a real asset, which is why advances in legislation propel an environment of comfort in the market.

Trillions to tokens

In a 2021 report, London-based advisory firm Moore Global predicted that $1.4 trillion of international property assets will be converted to digital tokens by 2026, representing only 0.5% of the current $280 trillion global property market.

In Dubai, there are many reasons to be bullish on this trend because real estate is among the most popular areas for foreign direct investment and undoubtedly one of the most significant asset classes.

The sector achieved 2.4% growth in the first quarter of this year, contributing nearly 9% of the real GDP. It has been a key factor in helping Dubai’s economy overcome the effects of the global Covid-19 pandemic.

The wider UAE and neighboring Gulf nations are also key players in the real estate sector with multiple opportunities for tokenization across landmark residential, commercial, and industrial developments.

Numerous startups in the region and around the world are already getting ahead of the trend.

UAE-based SmartCrowd, a DFSA-regulated property investment and technology platform that leverages the Tezos blockchain platform for real estate tokenization, says it has distributed over Dh1.5 million in rental income to its community of investors since 2019. Earlier this year, the platform also announced a range of investment opportunities to invest as low as Dh500 in prime locations like Dubai Marina, JBR, and City Walk.

New pools of capital

In addition to expanding financial inclusion by lowering minimum investment thresholds, the added convenience of exchanging tokens on a blockchain provides greater transparency, speed, and efficiency in transactions – which, in turn, will reduce transaction costs associated with real estate investment.

Yet, while tokens lower the barriers to property investment, it’s important to recognize that the rise of investment platforms is also driven by surging interest among millennials who are independently comfortable with financial technology and often prefer alternative investing paths due to their mistrust in the status quo of traditional financial systems.

Emerging markets are home to 86% of the world’s millennials. Even more so, in Gulf countries, Arab millennials, who make up the majority of the region’s population, enjoy huge shares of family wealth accumulated over multiple generations.[2]

Tokenization of real estate could become increasingly popular among millenials— opening up new pools of capital as this digitally native generation enters their peak spending years.

As more awareness and education continues to grow— fueled by a digitally-minded, rising generation— tokenization has the potential to profoundly impact lives and transform the way people invest in real estate.

Change is coming, one token at a time.

About the author

Waleed Rassuli is the head of Tezos’ Gulf operations and focuses on developing the Tezos Community in the GCC region through active engagement with businesses, tech ecosystems and academic institutions.


——

Disclaimer: The content of the above information is sourced (or provided), in entirety or in parts from an external source and the content may or may not be edited. The Wealth Today shall not be held liable for damages arising out of any action taken with respect to the use or consumption of information or service published above or anywhere else on the website. This website does not guarantee the accuracy, views, opinions, or any promises expressed in the above news. 

If you find any errors or discrepancies in the above information, you can write to us at editor@thewealth.today.

——


Tags: financial inclusionFinancial InnovationReal Estate
Previous Post

Debt Resolution Startup Credgenics Expands Leadership in Pace with its Exponential Growth

Next Post

State Street Global Advisors Launches its 2022 Global Market Outlook: Markets Continuing the Climb, but Caution Warranted

Next Post
State Street Global Advisors Launches its 2022 Global Market Outlook: Markets Continuing the Climb, but Caution Warranted

State Street Global Advisors Launches its 2022 Global Market Outlook: Markets Continuing the Climb, but Caution Warranted

Recent Tweets

  • About
  • Get Engaged
  • Events
  • Contact
  • T&C
  • Privacy Policy

© 2021 The Wealth Today

No Result
View All Result
  • Investment
  • Wealth Management
  • Technology
  • People
    • New Leaders
  • Impact Investing
  • Partner Content
  • Risk & Compliance
  • About
  • Events
  • Advertise
  • Contact
  • Exclusives
  • Login
  • Sign Up
  • Cart

© 2020 The Wealth Today

Welcome Back!

OR

Login to your account below

Forgotten Password? Sign Up

Create New Account!

OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non-necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

SAVE & ACCEPT

Add New Playlist