Market Potential

From the Bank of China, J.P.Morgan Chase to the World Economic Forum - prominent institutions have either vouched or are actively participating in the tokenization markets by using the blockchain technology. One such market that stands to gain substantial advantage from asset tokenization is the real estate industry.

Driven by the evolving needs of real estate developers as well as investors, new solutions - from crowdfunding to real-world asset (RWA) tokenization - have become attractive to stakeholders.

A recent report indicates that the RWA market is estimated to reach a significant value of $16.1 trillion by 2030 [1]. The technological innovation of RWA also plays a major role in real estate assets. Insight from a Deloitte report suggests that the total addressable market for tokenized offerings in real estate is expected to grow to $3.3 trillion, with an annual growth of 6% by 2025 [2].

Moreover, innovative solutions such as crowdfunding have already grabbed the attention of investors. The global real estate crowdfunding investment market was estimated at USD 10.8 billion and is projected to reach approximately USD 250 billion by 2030 [3].

Over the last few years, Dubai has witnessed massive growth in the real estate industry, which has set new records in terms of transaction volumes as well as values. The year 2023 observed a 66% year-on-year (YoY) increase in transaction activity compared to 2021, with the total value of real-estate transactions surpassing $64 billion [4]. The revenue of Dubai’s real estate sales jumped 43% in the first half of 2023 [5], and the market shows no signs of slowing down.

Amidst the rapidly flourishing real estate industry, alternative innovations such as crowdfunding provide a way for investors to diversify their portfolios and benefit from the growing yields. Furthermore, the UAE government believes that the tokenization of assets can significantly bolster the economy. Abdullah Bin Touq Al Marri, the United Arab Emirates’ minister of economy, asserted that asset tokenization will be key to the country’s plans to double its economy in the upcoming decade.

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