C ESTATES Inc. has already tokenized P88.5 million worth of properties in Makati City prior to the commencement of operation of its online platform in November.
This initiative makes the Philippines one of the pioneers in digital property investment using blockchain technology.
One Roxas Triangle and West of Ayala are the first two condominiums in the country, the selling prices of which—P80 million and P8.5 million, respectively—have been digitized by the real-estate exchange provider.
Such secondary market properties have been encoded in a global public database using NEM blockchain platform.
Already listed in C Estates’s portal, they are now being traded under the Condominium Certificate of Titles that can be owned by foreign investors. “They are having a hard time paying in cash,” C Estates Chief Operating Officer (COO) Elixes Becislao said of the restriction to foreigners in terms of remittances in the country. “So one way is to put it in cryptocurrency so we can break those boundaries.”
According to him, they have been receiving a lot of inquiries from various potential buyers, mostly Chinese, Japanese and Koreans.
“They are very interested because the process is very easy. They don’t even have to come here in the Philippines. They don’t even have to sign a lot of paper work. All they have to do is just send in the cryptocurrency even [if they are located] in other countries. And then, we’ll process the documentation for them,” he explained.
Apart from simplifying the slow and strenuous process of purchasing and selling estates in the country, C Estates’s marketplace also serves as a viable investment tool.
Since One Roxas Triangle, for instance, has been already occupied by tenants, this is quite attractive for investors because there’s already an income that will be coming in, the COO said.
“It can give at least 5.6 percent rental yield annually based on the current rent[al rates]. For an investor, that’s very attractive compared to other countries like China and Indonesia, wherein rental yield will be like around 3 percent to 4 percent only,” he added. “Because we have several leads already, there’s a big chance that within this year these tokenized properties will be sold out.”
At present, C Estate is in the process of property listing and virtual trading. Out of around 8,000 estates already listed in its portal, 500 are CCTs. About a hundred of them have been already tokenized virtually, including the two Makati properties now being traded.
“The main concept of our platform is to sell properties in fractions to the public, so it will be easy to liquidate the property. But due to regulatory constraint, we cannot do it yet publicly. So all the transactions that we are transacting right now are happening privately,” he said.
The public buy and sell of properties on the platform will officially start in November. The next phase is the offering of Transfer Certificates of Title of either house and lots, raw lands, farm lands, and even mortgaged properties that can only be owned by Filipino nationals.
C States also plans to offer additional services, such as crowdsourcing, time sharing and land banking. It also intends to provide mortgage and home loan financing services and, eventually, expand the business to Malaysia, Indonesia, Thailand, Cambodia and Vietnam in preparation for the Asean integration.
“Those are the first targets that we have outside the Philippines, hopefully, early 2020,” Becislao said. “If we can make it in the Philippines, I doubt we cannot do it in other countries because regulations there are definitely much advanced than [ours].”