Traditional real estate investment has high barriers (typically hundreds of thousands to millions of dollars), poor liquidity (transaction cycles of several months), and significant geographic restrictions. Tokenization technology fundamentally changes this by fractionalizing property ownership or income rights.
Real estate tokenization typically involves three layers: the legal layer (SPV structure), the financial layer (token issuance and distribution), and the technical layer (smart contracts and on-chain settlement). Each layer requires careful design to ensure compliance and security.
Commercial real estate yields vary significantly across major global cities: Singapore CBD (4.5β5.5%), New York Manhattan (4.0β5.0%), Hong Kong Central (3.5β4.5%), London City (5.0β6.0%). Tokenization enables investors to access these markets with low minimums.
As the regulatory framework matures and market education improves, real estate tokenization is expected to become one of the fastest-growing segments of the RWA market over the next 3β5 years.