Today, Securitize announced it created a Japanese real estate investment platform using digital securities in collaboration with LIFULL and LIFULL Social Funding. Securitize is the tokenization firm backed by Sony Financial Ventures, Nomura and MUFG. The new project aims to promote real estate crowdfunding using blockchain.
Japan-based real estate information services provider LIFULL is listed on the Tokyo Stock Exchange with a market capitalization of $470 million. LIFULL has about 14 different affiliated businesses and subsidiaries that serve the Japanese real estate market. One of them, LIFULL Home, is not dissimilar to Zillow.
Two other subsidiaries focus on rural Japan. LIFULL Revitalize says one in three rural houses will be abandoned by 2033 and focuses on refurbishment. And LIFULL Social Funding is targeted at regional revitalization by encouraging investment in rural homes, which is the aim of the Securitize project.
LIFULL initiated the development of the real estate crowdfunding platform in collaboration with blockchain consultancy BUIDL. The latter was acquired by Securitize late last year to accelerate security token development in the country.
In a trial, the companies were able to reduce operational costs for funding real estate projects using the blockchain platform. Smart contracts enabled automation of security token distribution, dividend payments and redemption of securities. Investors and third-parties were able to view the flow of funds and tokens on a public blockchain.
“Our collaborative success in creating a comprehensive platform solution for crowdfunded real estate funds is very exciting, and it is a great start for Securitize and LIFULL as we work to modernize the Japanese real estate market together,” said Carlos Domingo, CEO and Co-founder of Securitize.
Securitize has developed a compliance platform for tokenized securities. The blockchain solution, called DS Protocol, enables trading of security tokens on secondary marketplaces.
Many companies around the globe are exploring real estate tokenization. Another Japanese real estate firm, Lead Real Estate, is using blockchain to fund construction of condominiums and hotels ahead of the Japanese Olympics 2020. Securitize is providing the technology for this initiative.
In Korea, SK Securities is working with Kasa Korea to develop a platform for tokenizing real estate. Meanwhile, German real estate developer Bauwens invested in Fundament Group, potentially giving the latter access to €6.7 billion worth of real estate projects in Germany.
Japanese firms are increasingly exploring blockchain for securities and tokenization. A few months ago, the Security Token Offering Association was launched by Monex, SBI Securities, kabu.com Securities, Daiwa Securities, Nomura Securities and Rakuten Securities. The consortium is working on developing standards for fundraising through security token issuance.