Paris – The luxurious property of AnnA Villa in Paris hit the headlines last week for being the first European property that was acquired through a blockchain based transaction. The property located in the Boulogne-Billancourt district of Paris was sold for a total sum of €6.5 million. The deal was managed by the French investment platform Equisafe and was based on the latest Ethereum protocol.
The property was sold for €6.5 million to the real estate firms Sapeb Immobilier and Valorcim, both of which are of French origin. The process was initiated by transferring the proprietorship of the property to a joint-stock company. Then the entire property was divided into 100 tokens, which could be further subdivided into 100000 parts, making each segment worth €6.5. Bilal El Alami, co-founder of Equisafe said, “Each token is encoded to contain the conditions for the purchase, sale and exchange of securities, as well as the rights to which it grants access.”
The blockchain based procedure has many advantages over traditional methods. The complex legal methodology of the entire deal was encrypted and recorded on the blockchain, which not only saved time and effort but also ensured enhanced security. The experts have pointed out the real estate industry can benefit through the process of tokenization, as with the properties broken up into small shares, more individuals can invest in the same. In the case of AnnA Villa, anyone with €6.5 can buy a share of the property.
A recent article in Fortune reported the total value of global real estate market at $217 trillion. This indicates the huge role it can play in determining the shape of global economy. Blockchain brings in decentralization and transparency while being immutable at all fronts. This eliminates middleman, speeds up the process and prevents frauds. With tokenization enabling fractional ownership, real estate deals will not just be a restricted to the wealthy anymore, thereby changing the face of the business.
The European villa is not the first asset to be sold through blockchain based transactions. In 2018, a Manhattan property worth $30 million was tokenized through Ethereum. In January of the present year, a luxury estate in Aspen, Colorado raised more than $18 million through a security token offering. Many digital equity firms have plans to tokenize a range of properties in the current year. The Elevated Returns group has plans for $1 billion worth of real estate in using Tezos while the UK based BRIKCOIN plans to build a housing project through blockchain.
With blockchain having the power to revolutionize the real estate business we are sure to see more such deals taking place in the near future.