UAE LandOrc real estate tokenized lending platform to enter India
UAE headquartered, LandOrc, which is tokenizing lending to the real estate industry has announced it will be entering the Indian real estate industry. Global investors have invested US$ 5 billion of investments in 2020 in India alone and has seen the participation of marquee investors like Blackrock, Oaktree, Bain Capital, Capital Land, Sumitomo, Meritz etc.
UAE based LandOrc is focusing specifically on this segment by tapping into alternate funding available from the large capital base within Decentralised Finance (DeFi) and crypto assets worth US$ 2.2 trillion, globally. This is much needed in India because most of the capital in India real estate has been focused on larger cities makng the real estate funding gap around 100 billion USD.
This funding gap is most felt in the 104 Tier 2 cities in India, already representing 75% of India’s aggregate GDP. Real estate activity in the Tier 2 and 3 cities are experiencing the highest growth rate, especially in the smaller scaled projects.
LandOrc is offering tokenizing lending with an average deal size of US$ 150 thousand per project and with tenures of less than six months to fill the funding gap in Tier 2 and Tier 3 cities. The low value, high volume and fast turnaround of projects offers risk mitigation to lenders. Ensuring a high debt scenario for a single property developer like Evergrande is unlikely to happen. Additionally the lending is secured against a land collateral, held via a Non Fungible Token (NFT) on the blockchain.
The transparency and speed of a blockchain based approval system ensures that the property developers are able to access lending at a faster time frame and the cost of capital is lower than what is available locally. Thus LandOrc is enabling the reduction of the cost of housing and providing a growth driver to the real estate industry.
This tokenization of lending allows for global investors to participate from the comfort of home to achieve upto 20% APR (annual percentage returns) on the LandOrc platform.
LandOrc is in the process of replicating the same lending model in other markets like Australia, United States, Sri Lanka, Canada etc. Focussing on high interest segments. The World Economic Forum had estimated the size of tokenization of assets to reach US$ 24 trillion by the year 2027. The rise of technologies like blockchain has fast forwarded the growth of tokenization, for any asset or financial instrument.
This impact is seen in the growth of NFT marketplaces that have reached US$ 2.5 billion sales focussing primarily on art, entertainment and gaming sectors.
This offering allows individuals and companies involved in DeFi to diversify their investments and include assets that are linked to real world assets like land and real estate. Thus ensuring greater security for their investments and compliance to the increasing regulation seen within the crypto environment.
