By Real estate has always been considered an industry that could benefit from tokenization. Real estate tokens are already circulating in various secondary markets. This, however, is no longer something to look forward to, but it has actually been done. Just last week, the AnnA Villa in Paris wrote its name in blockchain history and became the first ever European property that was sold completely on the blockchain.
Located in Paris’s Boulogne-Billancourt district, the luxury property was valued at €6.5 million and has been sold to a pair of French real-estate companies, Sapeb Immobilier, and Valorcim. The entire transaction process was taken care of by French blockchain investment platform called Equisafe, which is powered by the Ethereum token, is one of the many companies that have been working towards bringing the real estate sales into the blockchain. The process of sale for AnnA Villa involved transferring the ownership of the building to a joint-stock company (SAPEB AnnA) and then dividing the company into 100 tokens to be distributed to the owners respectively. Every token can be further broken down into 100,000 units with each share worth as little as €6.50.
This has been recorded as one of the first few real-estate transactions to be executed on the blockchain. Last year, a property in Manhattan worth $30 million, was tokenized on the Ethereum network. A luxury resort in Aspen, Colorado raised a sum of $18 million through a security token offering this year. Earlier, Real estate has always been the investment choice of the Rich. This is one such asset that provides a great degree of passive income and most people are barred from entering the real estate market due to the huge investments. One can easily see how tokenization of the property over the blockchain can make it affordable and easily accessible to the common people.
Other than liquidity, there are various other advantages that the blockchain technology holds for the real-estate industry. According to the United Nations, $800 billion – $2 trillion USD is laundered globally every single year. A significant amount of it is laundered through real estate. Introduction of blockchain could help prevent problems like this because data can easily be verified on the blockchain and cannot be tampered with. Even in case of the AnnA Villa, all legal documentation was encrypted and recorded on the blockchain, the time and cost of not having to verify all the information manually with the help of scaling are pretty massive. Equisafe is assuring us that in the near future, it will be possible for an individual to be able to create investor profiles and gain access to various offers in a matter of minutes.
The blockchain industry could open up doors for potential investors from all across the world. This would be beneficial for both the industries as various tokens will have better real-life usability.
The territory is yet to be explored, but from what we’ve seen so far, blockchain technology could function in harmony with the real estate industry and it could benefit in a massive way.
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