Crypto Will Power Real Estate Portfolio Worth $1 Billion, Landmark London Hotel to Be Tokenized
According to proptech firm Liquefy, an award-winning luxury hotel situated in London’s affluent Mayfair district is being tokenized. The technology provider will allow people to purchase tokenized securities backed by the property.
According to the company’s press release, the landmark hotel is located in a redeveloped historic building with views of Hyde Park and Mayfair.
Currently owned by a consortium of Gulf families, the hotel is part of a larger real estate portfolio worth $1 billion that will become tokenized, enabling fractional sales to interested investors and allowing ownership transfers to be recorded, tracked and traded on the blockchain.
Says Adrian Lai, CEO of Liquefy,
“As blockchain technology progresses we’re seeing accelerating interest in digital securities from the real estate sector. The deal sizes and pipeline have grown exponentially over the past year. We’re certain that there’s huge potential for technology to enable new business models in the real estate ecosystem that lower operational costs and increase liquidity.”
Sparsh Singhal, a blockchain analyst at the firm, explains that tokenization will reach into a number of industries allowing people to own a few square meters of an apartment in Hong Kong or a stake in a collectible Formula 1 race car.
Types of assets that can be tokenized
“When all these assets get tokenized, they can be broken into smaller ownership stakes. In other words, they can be fractionally owned by multiple parties. The asset is tokenized using security tokens. A security token is any cryptocurrency that pays dividends, profit shares or invests in a project with the expectation of profit. It derives its value from underlying real-world assets. For instance, a million-dollar property could be divided into 100 security tokens, whereby each security token represents a 1% stake in the property and its future cash-flows such as rental.”
The enterprise-ready platform allows institutions and investors to digitize alternative assets such as sports teams and rare collectibles.
The Hong Kong-based company is also collaborating with The Private Office of Sheikh Saeed bin Ahmed Al Maktoum and SEED Group with a focus on Dubai to establish digital securities regulations and develop private sector projects based on digital securities.