This article appeared in the magazine of RES VZW, alumni association for masters in real estate.
Towards a new investment standard?
The real estate sector does not stand still. New technologies and formulas are appearing with the regularity of a clock. One of them is the use of tokens to invest in real estate. Edgar Warmoes of Immotokens, the first company to offer this formula in our country, and Wouter Neven of law firm Lydian explain it.
Edgar Warmoes: "We virtually divide the investment property into small parts, where you as an investor buy the number of parts you want, in the form of tokens. Our tokens are NFTs, which stands for non-fundable tokens. This means that they represent assets, in this case real estate. In exchange, you receive part of the rental income and part of the sales value when the property is sold, and you contribute to the costs. For security and automation, we use blockchain technology. In theory, we don't need this technology, but it makes things a lot easier for us. If, for example, 10,000 people invest, you can use this technology to steer it in the right direction, automate it and secure it."
Pioneer
The technology has been used abroad for some time, but in Belgium Immotokens is the first to go.
Wouter CousinsThe big challenge was to qualify the Immotokens and fit them into the legal framework. We succeeded. Technically, the tokens are a kind of debt financing instrument that is to some extent comparable to real estate certificates. The holder of a token becomes the owner of a virtual piece of real estate. Legally speaking, the party issuing the tokens - the token issuer - remains the owner of the property and the token holder is the beneficial owner. Certain personal rights are attached to the agreement, but no business rights. This is a consequence of Belgian business law. If you have property rights to a real estate property, you always have to pass the notary and pay registration fees to make it opposable to third parties. With this construction, however, it is impossible to have all those 'co-owners' go through the notary when buying or selling."
Solution
Despite the fact that the formula - certainly in our country - is still in its infancy, the belief in the future is great. Edgar Warmoes: "We started with one building and the next are already in the queue. We are not excluding collaborations with interested project developers, for example. I think it could become a new standard. The number of options for people to do something with their money has shrunk considerably. Real estate is unaffordable for many, a savings account no longer yields anything, the stock market is uncertain. Our formula can offer a solution for many people. Not only can you enter with a limited budget, there is also the advantage of diversification, which should not be underestimated. It is better to invest a bit in 10 properties than to put everything in one property. You also have much less hassle. You don't have to look for a property or tenants yourself and we take care of professional management." Wouter Neven picks up: "An additional advantage over the classic real estate purchase is that as a token holder you are extensively informed about the possible risks of the property. That is certainly not always the case when you buy real estate in the traditional way. The contracts also offer a great deal of security.
Limited liquidity
Since there is not yet a secondary market for tokens, the liquidity of Immotokens remains limited for the time being. However, we are also working on that. Edgar Warmoes: "We are working on an active resale platform, where you can sell your tokens and where we make our database of investors available. I believe in this concept, because your rental return indexes and your tokens are effectively worth more after, say, 5 years."
