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Smartlands eyes institutional-level tokenised real estate

Yaroslava Tkalich, CMO at Smartlands

Yaroslava Tkalich, CMO at Smartlands

Global digital securities platform Smartlands is currently structuring institutional-level offerings within the real estate sector, allowing the tokenisation of bigger projects, according to the CMO.

Speaking to IBS Intelligence, Yaroslava Tkalich, CMO at Smartlands, said the company has been generating interest from institutional customers looking to increase the liquidity of real estate.

“We’ve been making a push towards institutional customers and have generated serious interest in Smartlands’ capabilities on the part of institutional investors and asset owners. Therefore, the projects in the pipeline are going to be structured as institutional-level offerings. This will allow us and our partners to tokenise big projects creating institutional-level liquidity,” she said.

Smartland also announced it has partnered with the UK branch of real estate agency network Sotheby’s International Realty to experiment with tokenising luxury properties.

The two companies signed a cooperation agreement to collaborate in a series of experimental projects in the field of tokenisation of luxury real estate and explore the opportunities related to the issuance of digital shares representing ownership rights.

Tkalich said asset tokenisation is the future of financial markets – “there’s no doubt about that”.

“In 2019, security token offerings have gone up by 130 per cent compared with 2018 – that alone should tell you that this mode of crowdfunding equity or investing in virtually any asset type, let alone real estate, is here to stay. The benefits of asset tokenisation are immense.”

With tokenisation, service functions currently carried out by middlemen could be automated via smart contracts, and it serves as a cost-effective solution as the intermediary fees are passed to end-investors, creating a barrier to entry. Securities on the blockchain are also immutable.

Tkalich explained: “This is where Smartlands can add substantial value. Once an investor buys tokens issued on our platform, the history of ownership cannot be erased. Once data has been affixed on a blockchain, i.e. after the transaction, nobody, not even a system administrator, can alter it. This is highly beneficial during audits, as you can prove your data hasn’t been altered, reducing time and costs.”

Higher liquidity is another benefit, as privately issued securities are nearly illiquid, yet the use of blockchain allows for a freer circulation of value, preventing the so-called double-spending problem.

READ MORE: London-based Smartlands launches money management app Smartee

When asked about upcoming plans, Tkalich said the sky’s the limit. Smartlands is currently involved in a number of projects in extraction and collection of natural resources, both commercial and residential real estate, the industrial property market, renewable energy, agriculture, sustainable living and technology companies with an emphasis on telecom and IT sectors.

“We plan on tokenising a Disruptive Technologies fund with the target of €8 million and the Precious Metals fund (€5 million). However, our star project is the private sale of the equity stake in Smartlands Holding LTD. We want to transition from a digital securities issuance platform to a Global Digital Banking Ecosystem, and we offer an opportunity to invest in the tokenised equity of Smartlands Holding LTD.”

In 2019, the Smartlands selected 15 projects ranging in deal size from €100.000 to €50 million with tokenised shares totalling more than €100 million.

“Among the front runners are a £500 million residential highrise in the heart of London, a smart city in the coastal area of Brazil, and a successful vineyard in California. We are also considering private shares of a pre-IPO billion-dollar company in the US,” Tkalich said.

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