Tokenised real estate to reach $1.4 trillion in 5 years

A report issued by Moore Global on Wednesday highlights that the real estate digital revolution is sweeping across the world, and that $1.4 trillion in international property assets will be tokenised over the next five years, helping to add far more liquidity to the real estate asset class. 

Real estate experts at Moore global have predicted that $1.4 trillion in property assets could be tokenised within the next five years. The move into tokenisation should bring a huge boost to real estate, by making it cheaper and more accessible. 

According to Dan Natale, leader of Moore Global’s real estate group: 

“Tokenisation is an emerging trend with potential to become a mega trend – and it is absolutely going to be a disrupter in global property markets. It has potential to lower the cost of capital, increase the pool of potential investors and increase liquidity.” 

He added: 

“It could take time for a critical mass of institutions to invest with confidence in tokenised real estate. However, if even just 0.5% of the total $280 trillion global property market were tokenised in the next five years, it would become a $1.4 trillion market.” 

The real estate asset class is simply huge, and towers above all other asset classes. Until now, the asset has been used as a financial instrument by investors to protect investments over the long term, given the steady capital appreciation and income rents etc. 

However, once invested in real estate, that liquidity is generally locked up for extended periods of time. Therefore, the emergence of a secondary market, built around tokenisation of property assets, has the potential to unlock vast amounts of this liquidity. 

An early example of such a process is that of RedSwan CRE, mentioned by a Ledger Insights article. The company tokenised more than $2 billion in real estate early last year. However, it wasn’t until the end of the year that RedSwan was able to offer the first tranche of $300 million to investors. Those investors that buy have their tokens locked for at least one year before they can sell. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.