Real estate firm Coldwell Banker (CB) plans to tokenize luxury real estate assets, starting in Thailand. The local office has partnered with blockchain firm Coinweb targeting luxury properties. A Beta launch is scheduled for Q3 2022, subject to Coinweb acquiring an exchange license from the Thai SEC.
Tokenization promises to improve the liquidity of various assets, including real estate, by fractionalizing the investment and lowering backend investment costs.
Many real estate assets that are tokenized are commercial properties or rental units. Peter Meyer, CB Operations Director in Thailand, said the company sells and manages a large portfolio of luxury villa rentals in Thailand and worldwide.
“On a rental basis, they throw off not insignificant yields during normal times. Coinweb identified with us that liquidity could be unlocked via tokenisation using part of the yield. Much of the time luxury can be more illiquid than other asset classes, so the proposal was a good fit,” said Meyer, responding to Ledger Insights questions via email.
CB sounded out some of its larger clients and managed to get commitments before entering an agreement with Coinweb.
Subject to the success of the Thai pilot, Coldwell Banker Thailand has agreed to introduce the Coinweb solution to other CB head offices where the regulatory climate is conducive. “We have a pretty unique relationship with other head offices of different territories due to referrals we receive from them,” said Meyer. “Ultimately, UHNWs all around the world looking to buy luxury properties in Thailand get funnelled to our office from the other head offices in the different territories.”
Coinweb is a blockchain project that is not well known and has not been widely independently reviewed. It’s a layer 2 solution (not a blockchain) that enables interoperability by allowing data to sit on multiple blockchains while the smart contract performs calculations on Coinweb’s InChain. This is “cross-chain computation platform”.
The tokens are issued via Coinweb but the data can be stored on one or more blockchains. “We aim to unify interoperability where all underlying chains can be treated as if they are one,” a spokesperson told Ledger Insights via email. For now, InChain supports Bitcoin derived blockchains, with Ethereum derived blockchains and others on the roadmap.
Moore Global recently predicted real estate tokenization could reach $1.4 trillion within five years.
Meanwhile, several major institutions in Japan have started tokenizing real estate. Mitsui partnered with SBI and MUFG to issue real estate security tokens. And Tokai Tokyo partnered with Singapore’s ADDX. And in Germany, the Deutsche Börse and Commerzbank invested in digital asset venture 360x, which plans to tokenize real estate.
Update: The Coinweb description was updated to clarify it is not itself a blockchain.