Real Estate Sector Must Build Trust and Consolidate Before Tokenisation: Experts
Tokenisation of land is expected soon in India, but more work needs to be done regarding the transparency of land records in India, resolving legal ambiguities, as well as building trust among investors, including through the use of technology, said a panel of real estate industry experts at the Moneycontrol India Web 3.0 summit in Mumbai.
The panel was attended by Niranjan Hiranandani, chairman of the National Real Estate Development Council (NAREDCO) and founder of the Hiranandani Group, Reshmi Panicker, executive director- land services and residential, Knight Frank India, Vinod Rohira, MD and CEO of K Raheja Corp, and Samujjwal Ghosh, CEO of House of Abhinandan Lodha.
In his remarks, Hiranandani said that investments in real estate and land, which is expected to be democratised through the use of blockchain, tokenised land, and decentralised records, are seen increasing significantly over the next few years. However, he noted that transparency and consolidation will also be essential for the industry.
“Capital markets have too much money, real estate is the place to put that capital. I believe that there will be consolidation first in the industry, and tokenisation second. Prior to COVID-19, the Mumbai Metropolitan Region had 18,000 developers, now there are 12,000. In the future, trust and consolidation will be more important for investors in the future,” said Hiranandani.
The panel discussed the importance of digital transformation and the role of technology in enhancing transparency and efficiency in the real estate sector. They highlighted the need for robust legal frameworks and clear guidelines to ensure the successful implementation of tokenisation. The experts also stressed the importance of building trust among investors, which can be achieved through consistent performance and transparent practices.
Reshmi Panicker of Knight Frank India added that the real estate sector needs to address the issue of fragmented land ownership and the lack of accurate land records, which can hinder the process of tokenisation. She suggested that the government and industry stakeholders should work together to create a comprehensive and reliable land registry system.
Vinod Rohira of K Raheja Corp emphasized the need for consolidation in the real estate sector, noting that a more consolidated market would be better positioned to adopt new technologies like tokenisation. He also highlighted the importance of investor education and awareness about the benefits and risks associated with tokenised assets.
Samujjwal Ghosh of House of Abhinandan Lodha discussed the potential of tokenisation to democratize access to real estate investments, making it easier for smaller investors to participate in the market. However, he stressed that this potential can only be realized if the necessary infrastructural and regulatory frameworks are in place.
Overall, the panelists agreed that while tokenisation holds significant promise for the real estate sector, it is crucial to lay a strong foundation of trust, transparency, and consolidation before fully embracing this innovative technology.
