Blockchain technology is being increasingly used in various sectors, and its use in the real estate sector is worth consideration. This is especially relevant as the Dubai-based real-estate business DAMAC has signed a deal with MANTRA, a blockchain-based company focussing on real-world assets (RWAs). The deal aims to tokenize real estate assets in Dubai. Assets worth $ 1 billion are expected to be tokenized and traded online. The deal between DAMAC and MANTRA is based on the principle of asset tokenization where real-world assets are tokenized and traded online. This deal will be a game-changer in the use of blockchain technology in real estate business.
Blockchain Technology In Real Estate: Use Cases
Blockchain technology has the power to transform the real estate business and its functioning. It provides innovative methods to optimize retail and commercial property sales, streamline payments, and increase access to real estate funds and investment opportunities. Real estate business can be conducted across the globe irrespective of any geographical limitations.
The different use cases of blockchain technology in real estate business are explained in detail here.
- Asset Management and Real Estate Funds: Blockchain technology can be used for asset management of real estate funds. These assets can be programmed to include ownership rights, transaction history, and rules to ensure that asset issuance, distribution, and transfers are regulation-compliant. Tokenization of assets has other utilities such as reducing the costs and increasing the speed of creating, issuing, and exchanging assets, innovating new features, administering dividends, and managing other corporate actions.
- Project Financing: Blockchain technology eases the acquisition of funds for financing new real estate projects. Blockchain technology helps by facilitating investor management for developers and ensuring investment transparency and continuous ROI tracking for investors. These services will boost investor confidence and invite more people to the real estate sector.
- Loan and Mortgage Securitization: Blockchain technology provides streamlined solutions to verify information, secure data sharing, immutable transaction monitoring, and real-time payment settlement. Digitizing loan and mortgage data helps to include relevant data such as ownership rights and loan payment history to support decision-making in the future.
- Property Management: The data-sharing services provided by blockchain technology can help in property management by giving oversight on various issues such as property ownership and rental collections. This gives property owners oversight of their portfolios and helps in its easy management.
- Urban Planning: The use of blockchain technology in urban planning will help users take part in decision-making, get incentives for the same, and stay informed. This community engagement will help in better management and planning initiatives.
- Property Development and Construction: In the case of property development and construction, blockchain technology can be used to streamline communication between reputation managers, developers, contracts, and other stakeholders. The smart contracts of blockchain technology can be used to automate payment terms and conditions.
- Real-time Accounting: Accounting is another important requirement in the real estate sector. With the help of blockchain technology, all the transactions can be recorded and tracked on-chain. The accounting process is automated and can be fulfilled almost immediately. This will ensure compliance in almost all fields such as regulatory oversight and investor relations.
Benefits Of Using Blockchain Technology In Real Estate
The use of blockchain technology provides the following benefits to the participants in the real estate industry.
- Tokenization of real estate assets
- Process efficiency for various industry operations
- Reduced costs from process automation
- Access to global asset distribution
- Access to investor pools
- Access to secondary market opportunities
- Data accessibility to increase transparency
The Bottom Line
With the wide range of uses of blockchain technology in the real estate sector, the newly signed deal between DAMAC and MANTRA will open new avenues in the sector. DAMAC can now tokenize real-world assets over the Middle East and bring in foreign investment to them.
This will be a starting point for further deals within the industry that pave the way for global partnership. Thus Dubai will emerge as a global center for digitalized real-world assets and other crypto related industry. This will also help in bridging the divide between the West and the East in terms of cryptocurrencies.
