Start-ups across Asia Pacific are increasingly testing the potential of Blockchain, a disruptive technology impacting industries from healthcare to real estate.
Singapore’s Suntec City building is setting itself up as a hub of blockchain players with several companies setting up shop in a 1,336sq feet co-working space. A similar project is being launched in Tokyo.
“Blockchain technology offers a means to improve transparency,” says Christopher Clausen, Associate Director of Asia Pacific Research at JLL. “There’s plenty of potential for use across industries, and real estate is another big area for blockchain application as investors are demanding, and expecting, ever-greater levels of transparency.”
In its simplest form, Blockchain is a distributed database. By recording and combining transactions into a de-centralized ledger system, it creates a “chain” of chronological data that no one party has control of. The value lies in the system’s ability to authenticate and track transactions in real time without the use of a third party, such as a bank.
Corporates are also taking note. HSBC Australia joined forces with start-up Moneycatcha last year to use its end-to-end blockchain-enabled platform for approving home loans automatically.
“A blockchain based registry would make it easier for existing owners to market their assets for sale while potential investors would find it easier to identify assets consistent with their investment strategy,” Clausen says.
Blockchain bodes well for Asia Pacific’s bustling Proptech scene, where China and India are leading the way in fundraising, at US$2 billion and US$1.7 billion, respectively, according to JLL’s Proptech report.
“Blockchain offers a new approach to asset securitization and ownership and holds the potential to reduce market liquidity risk,” explains Clausen. “The key is really improving liquidity and enabling investors to more easily acquire and dispose of assets.”
While there is huge potential for blockchain start-ups in the real estate industry, companies will nevertheless require support from the governments in the countries that they operate. Start-ups who experience rigid governmental regulations towards their new business models will face the greatest challenges.
So which country has the edge? Here’s a closer look at the most promising Blockchain and Proptech developments around the region.
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