This interview is part of our new Blockchain In Real Estate series, where we interview the world's leading thought leaders on the front lines of the intersections between blockchain and real estate.
In this interview we speak with Ali Tumbi, CEO of Global REIT, to understand how his company is using blockchain to transform the real estate business, and what the future of the industry holds.
1. What's the story behind Global REIT? Why and how did you begin?
AT: I have been involved in all aspects of real estate, including brokerage, development and property management since 2015. My company, Aqua Properties, has established itself in the top tier of real estate firms in Dubai, UAE.
I have always been passionate about blockchain technology and its tremendous potential to transform how business is conducted. We feel that this is especially relevant in the real estate industry.
I decided to start Global REIT, the world’s first blockchain based Real Estate Investment Trust, to target this market gap and merge blockchain technology with real estate, allowing investors to benefit from all the advantages of blockchain with the backing of an established, real world business model and real-world income producing assets.
We raised approximately USD 14M from our public ICO which finished on July 1st, 2018. We have issued two tokens, GRET and GREM, each of which provide a dividend as well as utility benefits in our Assets Under Management.
2. Please describe your use case and how Global REIT uses blockchain:
AT: Global REIT is a Real Estate Investment Trust on blockchain. Our business plan is to acquire income producing real estate assets and to distribute the rental income and the property management income as a dividend to our token holders.
We use blockchain by issuing asset backed tokens which provide a dividend. In the specific example of our first Asset Under Management, a four star hotel in Dubai, we have issued 75M tokens (called GRET) at USD 1 per token, which matches the USD 75 million valuation of the asset.
We also use blockchain to distribute dividends to our investor’s wallets on our platform. They are distributed in the form of USD-T.
In addition to this, we are developing a utility program which will give token holders discounts and other utility benefits when they visit or use any of our Assets Under Management.
3. Could you share a specific customer/user that benefits from what you offer? What has your service done for them?
AT: Our offering should be of particular interest to crypto investors who want to hedge their earnings by rooting back to real world income producing assets, without leaving the crypto space.
For this customer segment, they can enjoy stable monthly dividends by purchasing our tokens with BTC or ETH, which can help offset the general volatility we can sometimes find in the majority of crypto assets.
Our offering is also an easy way for traditional investors to enter the crypto asset sector, with minimal risk and technological knowledge, while remaining rooted to the very established real world business model of a Real Estate Investment Trust.
4. What other blockchain use cases in real estatte are you excited about?
AT: Blockchain can be used in a variety of industries to provide undeniable advantages in cost reduction, security and ease and speed of conducting transactions. Nowhere is this more relevant than in the real estate industry.
We feel that blockchain can and will increasingly be used to tokenize real estate assets to allow for effective crowdfunding of assets as well as partial ownership of assets.
We also believe national and regional authorities will eventually start using blockchain technology to conduct and verify real estate transactions, as well as to keep a secure store of title deeds and ownership records.
We also see a lot of synergy with utilities companies to link utility bills and receipts with specific properties using blockchain technology.
We are just scratching the surface of how blockchain can transform the real estate sector, and we at Global REIT are excited to be a part of this journey.
5. Where will Global REIT be in 5 years?
AT: We plan to continue to acquire income producing assets on long term leases with stable tenants. Our 5 year plan envisions us managing a diversified portfolio of assets amounting to approximately USD 1B.
We also want our tokens to be listed on major crypto exchanges, where we can provide the benefits of real estate ownership to a larger number of potential investors.