UK Sotheby's International Realty, an affiliate of a global estate agency network specialising in residential sales, lettings, development sales, investment and international sales, chose Smartlands, a global digital securities platform and the first mover in regulated asset tokenisation on blockchain, as a partner to explore the opportunities related to the issuance of digital shares (security tokens) representing ownership rights for luxury real estate properties managed by the firm.
The pilot project will be a newly-built duplex apartment at Lillie Square, near Hyde Park, which will be managed by UK Sotheby’s. The property is set to have practical completion on the construction and internal fit-out in Q1 2020, with particular details of the offering announced then.
Robin Paterson, joint chairman and chief executive officer at UK Sotheby's International Realty, said the company was proud to have attracted the world’s wealthiest ‘individuals with impeccable taste for the best in exclusive real estate’.
“Our customers’ needs evolve with the advent of technology, in the meantime the property industry is also going through digital transformation,” he said. “Collaboration with Smartlands will help us explore how innovative tech can help us add value to our proposition.”
With this approach, he added, the benefits for international sellers and buyers would be immense.
“Smartlands is transforming the value exchange on a global level, creating a wide array of opportunities for private high-net-worth individuals the world over by allowing them to find each other easily, create offers, issue equity, diversify their portfolios, and grow their wealth without ever having to lift their fingers off the computer keyboard or a mobile device,” Paterson concluded.
Smartlands chief executive Ilia Obraztsov said the company was ‘honoured’ to collaborate with UK Sotheby’s on this endeavour. “We realise that high-earning consumers from the United States, United Kingdom, United Arab Emirates, India, China are looking for new ways to invest in luxury properties globally,” he commented.
“We open the way to a new generation of investors – early adopters who successfully leverage tech innovations to make investment decisions and diversify their portfolio. The option to invest using fiat currency or cryptocurrency makes it an especially lucrative opportunity for overseas investors. The Sotheby's centuries-old tradition and Smartlands' technological edge is a perfect combination for creating a completely transparent global network of highly sophisticated investors in luxury property markets.”
What is tokenisation?
Asset tokenisation is a process similar to traditional securitisation. However, the digital shares are issued on the blockchain in the form of security tokens.
Just like in the classic stock markets, security tokens represent the immutable right of ownership in an asset and allow investors to receive dividends or profits.
The very first use case in the UK was presented by Smartlands this summer. Within the FCA-regulated legal framework, the platform tokenised a student development in Nottingham. In the US, meanwhile, Smartlands operates in partnership with a FINRA-licensed broker-dealer.
Property Investor Today has covered the work of Smartlands a number of times this year. In August, we spoke to Arnoldas Nauseda, chairman of Smartlands, for his thoughts on whether fractional ownership and tokenisation are the future for property investment, while just last month this guest piece from Yaroslava Tkalich - chief marketing officer at Smartlands – looked at why investors would be surprised by the benefits of tokenising PBSA.
Smartlands, a worldwide platform for the tokenisation of real economy assets by issuing security tokens, was founded in 2017 and is based in London. It warns that, like any investment platform, it cannot guarantee profits or revenues, and potential investors should obtain their own professional advice before investing.