Blockchain technology has emerged in 2009 and has revolutionized the circulation scheme from centralized to decentralized. Through blockchain technology, transactions occur in a short time, the cost is relatively cheaper, safe, and transparent. With open database system and decentralized, blockchain attracts many people. Blockchain records all transactions made by users and the transaction can be seen to all the users because the blockchain information warehouse is stored permanently throughout the network users.
Transactions occurring within the blockchain system are recorded by the users’ computers at once announced for verification. Then the transaction records combined with other transaction records and then tied up in chronology. Then records of this transaction are called block. Block sequences are called blockchains. In blockchain we can add transactions but can not change transactions for which the information already exists. Blockchain does the that record with a mathematical calculation called cryptography that makes the record can not be imitated.
We often hear blockchain technology closely related to bitcoin, the digital currencies which is popular today. With the rising value, bitcoin become a much-hunted digital asset. Blockchain also has the potential to be used outside the scope of digital currency and is very attractive to many people. Recorded data stored in blockchain makes valuable transaction tool like property investment, jewelry, goods and services, and more. With the benefits of blockchain and its potential use in property investment, GLOBALREIT create a global real estate investment portfolio that will offer additional benefits than a traditional REIT by intertwining REITs to the Blockchain technology. Global REIT is the first ever Blockchain based Sharia-compliant REIT to be launched in the market. It is offering investors exposure to global real estate markets without the necessity of acquiring an entire property and shift the management and compliance obligations to the fund management.
What is Global REIT?
Real estate investing is an increasingly favourable method of wealth-building, and there are many ways for individuals to invest in real estate. However, traditional real estate investment models have immense barriers to entry. They create onerous burden in terms of regulatory and financial aspects attached to them and makes investing unfeasible for most of the potential investors. For example, if you want to own a real estate asset in a foreign country, in addition to the significant capital required for purchasing the asset itself, you would generally need to incorporate a local entity as an investing partner since investment by foreign investors is restricted in most jurisdictions. You also need to fulfill all the statutory requirements including but not limited to tax, accounting and ongoing registration obligations which have significant costs associated with them. Further, there are restrictions on the type of property funds that an investor may invest in, limiting choice and developers access to capital. Foreign direct investment also has vulnerability attached to it in terms micro and macro-economic conditions in each country.
To mitigate these risks and overcome investing challenges, market offers Real Estate Investment Trusts (REITs) as an alternative investment vehicle. A REIT is a trust, corporation or an association that owns, or finances income producing real estate and can be publicly listed or privately owned.
Global REIT works on the same mechanism as traditional REIT.
The following 2 aspects make it an extremely attractive investment platform in the real estate industry globally.
- It is a Blockchain based REIT.
- It will pay monthly dividend to all token holders.
Global REIT is the first ever blockchain based Sharia-compliant REIT to be launched in the market. It is offering investors exposure to global real estate markets without the necessity of acquiring an entire property and shift the management and compliance obligations to the fund management. Global REIT will acquire assets starting from U.A.E. and rapidly enter properties in jurisdictions worldwide. It will start with a Net Asset Value (NAV) of USD 75 million and will reach USD 2 billion by end of 3 years. The first ICO will take place with 90 million coins for sale. The investment made by token holders will be invested in tangible assets which will generate income for all shareholders.
Vision of Global REIT is to create a global real estate investment portfolio that will offer additional benefits than a traditional REIT by intertwining REITs to the Block Chain technology. Global REIT will begin its investor offering at its home base in Dubai, U.A.E. and then rapidly expand worldwide. The company sees cryptocurrency investors who want to simultaneously invest in real estate and earn regular dividends and, real estate holders seeking to exit into a liquid market anchored by cryptocurrency, as their key targets for participation on the Global REIT platform.
The ICO of Global REIT will offer Dual Utility tokens to its subscribers –
- Global REIT Fund Manager Token (GREM) and
- Global REIT Asset Token (GRET)
How It Works
At Global REIT we aim to create true diversification across multiple real estate asset classes to enable users to invest seamlessly into a broad asset backed portfolio. Our vision is to not only revolutionize the REIT industry within focused regions and geographies, but to create a diverse and vibrant platform for assets from multiple REITs across the globe to plug into, unlocking a wave of cross-investment potential and opportunities worldwide.
To enable this vision, we have built a world class robust platform on the Ethereum blockchain, leveraging the strengths of smart contracts to create custom asset tokens (GRET). The GRET token is based off the ERC20 standard, thereby making it fully tradable on all token exchange platforms, unlocking rapid, simpler, cheaper, and more secure trading than traditional REITs. This enables investors of all sizes to now hedge their risks not only in FIAT currencies, but in real assets instead. In addition to the GRET, our platform also enables a secondary token on the ERC20 standard called GREM. This globally tradable token allows investors to partake directly in the GlobalREIT Fund Manager dividends, similar to how traditional REITs are structured. Together, both the GRET and the GREM offer a turnkey solution to revolutionize real estate investments, making them accessible to multiple classes of investors.
Who would be interested?
- Crypto Investor
A crypto investor looking for stable dividends on a monthly basis and seeking to invest in real estate assets using crypto currencies
- Real Estate Asset Holders
Real Estate Asset holders looking to exit into a liquid market in the crypto domain
REITs who would like to take advantage of an already established block chain framework to enter crypto domain.
GRET TOKEN AND ASSET VERIFICATION
For a successful blockchain based REIT to function, proof of asset ownership is a vital component in the value chain. Our proprietary protocol to ingest real estate assets and tokenize them via a smart contract lies at the heart of the system. The architecture of the system is based upon developing a smart contract to establish trust between three key parties: 1) The Investor, 2) The Asset Owner (or broker), and 3) The GlobalREIT Fund Management Company.
The investor deposits either Ethereum or Bitcoin into the contract while the asset owner or broker registers their asset with the GlobalREIT Fund Manager (GRFM). The GRFM then proves receipt of the asset in notarized form and the investor can be confident that the contract will activate only when the validity of the asset has been established via the smart contract. At that stage, the investment currency is passed over to the asset owner and in return an asset backed token, GRET, is issued to the investor. The token implements the ERC20 protocol and can be traded on all global exchanges listing the coin.
GLOBAL REIT SECTOR
The Global REIT sector has grown significantly in the last decade; both in terms of REITs being introduced in new countries, and in terms of an increase in the size of the sector in existing jurisdictions. Data from NAREIT shows that the market capitalisation of the US REIT sector has more than tripled to $1trn in the past 10 years, with the number of REITs growing from 152 to 224. In Europe growth has been slower, but according to EPRA the market cap of the listed European real estate sector has grown by a third in the same period from 150bn to 200bn. In Asia the REIT sector has grown by almost two thirds, from $135bn to $213bn, according to data from Consilia Capital.
As per EY’s global REIT report issued in 2017, the stages of REIT regime maturity around the world stand as follows:
The ICO will be structured in a way that each investor will be issued 2 tokens.
This means that each subscriber will get share in the Fund Management Company (GREM) returns and the Asset Owning Company (GRET) returns besides the utility attached with both the tokens. Ethereum (ERC-20), Bitcoin (BTC) and Fiat Currency will be accepted for subscription to these tokens and in return, the dividends will be paid in USD and USDT (Tether). Real estate investing is an increasingly favourable method of wealth-building, and there are many ways for individuals to invest in real estate.
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