The Digital Transformation of the Real Estate and REITs Market in the Coronavirus Era

INNOVATION

The Digital Transformation of the Real Estate and REITs Market in the Coronavirus Era

Around the world, people are living in unprecedented times.


The impact of the coronavirus pandemic has slowed the global economy to a grinding halt. Bloomberg recently estimated that in the most extreme example, the coronavirus could cost nearly $3 trillion in lost economic output around the world[1].


The pandemic has also changed the way we shop for goods, communicate with others, and live everyday life.

Even the real estate market has not been spared. With people in self-isolation and quarantine, real estate agents are unable to show potential investors and buyers real estate as easily as they could have just a few short months ago. Instead, real estate agents have been forced to take a more "virtual" approach to accommodate a rapidly changing environment.


With Singapore's housing prices rising just 1.1% year over year and continued low-interest rates serving as a catalyst for demand from local and foreign investors alike, it appears to be a great time to consider purchasing real estate in one of the most desirable locations on earth.


In fact, a new report from consulting giant PwC[2] earlier this year confirms this sentiment, calling Singapore "the top investment prospect for property in the Asia Pacific."


Now, it is easier than ever to find a rental or investment property online using websites such as 99.co and SRX to learn about upcoming or active residential and commercial real estate listings. Websites like SGPano offer sellers a way to set up virtual tours for prospective buyers to tour the property virtually. Plus, it is becoming more common to sign leases and closing documents for real estate transactions online.


Thus, it is no surprise to see a greater shift toward the digitalization of real estate, which allows fractional ownership of an asset to be transferred instantly from one digital wallet to another.


For investors, this trend is an absolute game-changer. Being able to buy a sliver of a residential or commercial property in the same way you can buy equities in the stock market means investors can buy as little or as much of a real estate asset as they want.


Until recently, real estate investors had two options: buying physical real estate or investing in real estate via equities – or real estate investment trusts ("REITs"). These traditional methods come with a host of hurdles, delays, and plenty of red tape for investors.


Not only is it time-consuming for foreign investors to buy local real estate, but it is also an expensive process to get in and out of an investment.


Even REITs, which allow individual investors to obtain fractional ownership of the physical real estate, prohibit investors from buying and selling individual assets regardless of the type and size of assets. For example, current cross-border REITs transaction infrastructure lacks digitalization in the networks, often resulting in an onerous and costly manual process to transact the assets, the inefficiencies of which in turn increase costs throughout the ecosystem. Asset ticket size in REITs generally ranges from USD 500 million to 1 billion. However, any asset owners who want to sell their assets can now efficiently liquidate their assets through the Shareable Asset platform without geographical limitations.


Fortunately, tokenization offers investors an easier, cheaper, faster, and more secure solution. Users can buy and sell fractions of residential (subject to respective countries’ regulations), commercial, hospitality, or industrial real estate with the single click of a button – much quicker and less headache than what is associated with traditional real estate investment.


As tokenization becomes the preferred method of real estate investment in these changing times, Shareable Asset will serve as a one-stop solution.


Shareable Asset's platform uses blockchain technology to divide real estate assets into bite-sized units, so that investors with portfolios of all sizes, both retail and professional, can buy and sell them.


And while other competing sites require users to fill out long, cumbersome forms, Shareable Asset could not be easier to use and to manage investors.


The service is fully digital and fully integrated with the Singaporean government's MyInfo platform, which makes it easy for investors to sign up and get started immediately. Additionally, Shareable Asset uses security measures such as two-factor authentication (“2FA”) to keep its customers’ accounts and transactions secured and safe from unauthorized access.


Within five minutes, users can create and verify their own account and look through Shareable Asset's list of investment opportunities to find what is right for you. Best of all, its services allow users full management, classification, and access, instantly lowering your costs and improving your efficiency.


As the fintech industry continues to expand and become more mainstream, people will be able to purchase foreign real estate in coveted areas like Singapore without ever leaving home.



[1] Bloomberg, 2020 Coronavirus Pandemic Global Economic Risk
[2] PWC, Emerging Trends in Real Estate® Asia Pacific 2020

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