Securitize, LIFULL, Transforming Japan’s Real Estate Ecosystem with Blockchain

Securitize, a project that claims to be focused on facilitating compliant trading of private securities on public blockchains and multiple exchanges has inked a deal with LIFULL, a Tokyo-based housing and real estate information listing service, to create a funding platform for real estate investing, according to a blog post on March 10, 2020.

Securitize Revitalizes Vacant Japanese Homes with Blockchain

In 2013, there were about 8 million abandoned homes (akiya) in Japan, out of a total of 60.6 million homes in the country. Fast forward to 2020 and that number has risen to more than 10 million and Japan’s Ministry of Internal Affairs and Communications estimates that about 30 percent of all homes in Japan will be vacant by 2033.

In a bid to make the most of this worrying situation, Securitize and LiFULL have come together to launch a blockchain-based initiative aimed at revitalizing these abandoned properties via real estate crowdfunding.

As stated in its blog post, the real estate project was started by BUIDL, Ltd, a Kanagawa-based subsidiary of Securitize that offers consultancy services, in collaboration with LIFULL Social Funding Co., Ltd.

Phase 1 Successfully Completed

Interestingly, the team has made it clear that the first phase of the project has been completed satisfactorily, as they were able to prove that real estate crowdfunding powered by digital securities and distributed ledger technology (DLT) is far more practical as compared to traditional structures and it also reduces operational costs.

Commenting on the project, Carlos Domingo, CEO, and Co-founder of Securitize reiterated that the team is poised to modernize the Japanese real estate industry and the project is fast yielding the desired result.

In his words:

“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.”

Notably, the team says a lot of milestones were reached during the project, including the verification of significant reduction of cost of operations by automatic execution of security token distribution, dividend and redemption by smart contracts.

That’s not all, smart contracts were used to automatically execute dividends and redemptions according to the number of security tokens owned by participants, and there was total transparency in the entire operation as investors could easily track the flow of funds via the Ethereum blockchain.

In related news, earlier in February 2019, Securitize partnered with Elevated Returns, an asset management company, to offer investors tokenized real estate assets worth $1 billion on the Tezos blockchain.