Brickschain Private Limited

In their own words

The size of the professionally managed global real estate investment market grew from $7.4 trillion in 2016 to $8.5 trillion in 2017 and then it reached $8.9 trillion in 2018. The growth continued in subsequent years witnessing 10% CAGR and reached $13.2 trillion till 2022. In no time majority chunk of this amounts will be in hands of real estate tokenization. Real estate tokenization is an emerging trend with huge benefits, and it is expected to grow more in the upcoming years. Real estate is one of the safest investment instruments. But transactions in real estate are highly dominated by middlemen and time taken for one transaction is also relatively high compare to other investment options. Apart from this, cost of entry is also high as cost of real estate are generally high. Blockchain can solve this problem with real estate tokenization. The word ‘blockchain’ is essentially related to the word ‘Bitcoin’. Many think that it is one and the same thing. Just like in initial days of internet, people used to think of email as nothing but the internet. That wasn’t the case. Email was just first application of the internet. Exactly that way, bitcoin is the first application of blockchain technology. After bitcoin proved its resistance to temperedness, double spending, malicious transections, and ability to sustain without trusted third party regulator it gained value in multiexponential rates. This is where researchers believed in blockchain technology and started exploring its applications in hundreds of other economical domains. Real estate being at the top of value propositions was one of first few domains which were tested for blockchain applications. Outcomes of these tests was real estate tokenization. Real estate tokenization basically is a representation of physical assets on suitable blockchain platform where ownership of the title can be transferred on digital distributed ledger. Doing so has another important and lucrative benefit – fractional ownership of real estate assets because of which minimum threshold for investment drastically reduces to few hundred dollars. According to IBEF (Govt. of India), Indian real estate sector attracted U$ 5 billion institutional investment in 2020, which constitutes to 93% of the total investment. Which means retail investors invested only 7% out of total investments. This shows what potential does fractional ownership can have in a real estate market as fractional ownership will be naturally driven by retail investors. Assuming that share of retail investors shall extend up to 20% in next half decade provided that blockchain based fractional ownership becomes a common practice, size of real estate tokenization market in India alone would be as huge as $ 1.5 billion. Also, there are no barriers such as national territories to real estate tokenization as it works entirely on blockchain. This leads to conclusion that market of global real estate tokenization is going to touch Himalayan’s heights in no time span. This is not where it ends though. Once people start investing in real estate tokenization there is also need of specialised secondary market where they can trade their acquired tokens. This is where real estate exchange comes into picture. Real estate exchange (RXC) allows investors to invest in verified real estate projects where rate of returns is predetermined making it extremely safe investment instrument unlike traditional blockchain investments like cryptocurrencies which are very much volatile in nature.

Written by the company on its public Startup India profile. Not verified by us.

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