Our new Disruption by Blockchain series aims to highlight companies that are leveraging the incredible potential of blockchain technology to disrupt and revolutionize their industry. Through one on one interviews, we'll speak directly with industry leaders to cut beyond the hype and get directly to the heart of practical use cases and examples of how it will change the world, one industry at a time.
The following is an interview we recently had with Stefan Hickmott, CEO of Evareium.
1. What’s the history of Evareium? How and where did you begin?
SH: The Evareium model is rooted in creating a better ecosystem for investment, interaction and exchange in the real estate sector among all key stakeholders. The Evareium team comprises real estate and finance professionals with seasoned expertise in sourcing and creating value in the real estate and related space.
Two years ago, I was receiving calls from major investment banks and houses asking if we had assets for them to buy with their income-generation real estate fund. I realized that fund manager’s expectations were not aligned with what is available in the market, and what was needed was an ecosystem approach to sourcing, creating and migrating value across the evolutionary ownership chain for real estate. Put broadly: some investors seek high capital growth, some only want annual cash yield – by merging two models under one ecosystem, but keeping them mutually exclusive, a symbiotic process can be applied to satisfy all stakeholders’ needs. i.e. the existence of the other elements of the ecosystem justifies and satisfies the needs of the others.
This is then best played out through the application of blockchain and decentralized technology models, which can democratize the playing field to really present, we believe, a whole new paradigm of digitalized real estate investment.
2. Who are the founders and key team members?
SH: Evareium as a real estate investment model is really my brainchild and creation, but which has been developed into a much greater multi-token ecosystem by the incredible work of Alex Norta and Block Gemini Technologies, who took the original Evareium vision and developed it into a highly disruptive technological framework. I’ve been working in unison with Mark Wilson – Principal at Evarei Management – and other Evareium-related professionals to develop-out the vision and execute the business model.
3. What problem are you solving? Who are you solving it for?
SH: Real estate is one of the most illiquid, yet most prevalent, asset classes on earth. For example, there’s USD 220 trillion of real estate globally, but there is no way to quickly and reliably divest from physically owning it – it’s complicated and time-consuming to sell your interests in real estate, and there's no guarantee you will ever be able to sell at the price and in the timeframe that you may want to exit. That said, real estate is a solid brick and mortar asset which generates real-world cash returns and has tangible value, so it’s no wonder everyone likes real estate; after all, it’s a fundamental need. But in the digitalized world, which is rapidly expanding into every area of our lives, physical ownership of real estate as an investment is becoming a highly restrictive and somewhat nonsensical investment choice, unless you can in some way ‘click to invest and click to divest’.
4. What is your solution to this problem?
SH: Since our resolution of problems is multi-faceted across multiple stakeholders, there is not a linear answer to this question. Evareium creates a new, digitalized way of creating and exchanging value in real estate investment, so it inherently solves a number of problems by effectively applying a more holistic and symbiotic way to orchestrate instant value creation and exchange.
Our private equity investors seeking capital growth have the inherent problem of clean exit and liquidity resolved through the implementation of the REIT token aspect of the model, which is part of the Evareium vision. Our REIT investors will have the major problem of not being able to get quality assets to get yield solved, since the EVM capital growth model will gestate those and transfer them as fully auditable, investment grade assets. Our REIT investors will also avail very low fees and maximum pay-outs since we do not need to have an over-loaded fee model for the manager of the REIT, as they are making fair performance-based fees on the EVM token model.
We like to think that we will also be solving multiple problems for governments since Evareium will be helping to institutionalize the real estate sector to a higher level in a region where institutional ownership is substantially underrepresented compared to the rest of the world, therefore help to create a more solid and even more stable real-estate economy. As any successful symbiotic ecosystem should, everyone’s inherent problems become resolved, and this becomes even more so with the application of disruptive blockchain technology and transparent, decentralized technological systems.
5. Why is your industry ripe for disruption?
SH: More than USD 400 billion of real estate has been developed since 2001 in the six nations forming the Gulf Cooperation Council (GCC) – UAE, Oman, Bahrain, Saudi Arabia, Kuwait and Qatar. We estimate the total value of real estate in the GCC to be about USD 3 trillion. MEED (www.meed.com) predicts that there are more than USD 1 trillion of projects under construction or planned in the Middle East region, including infrastructure projects.
Major real estate research commentators estimate that real estate ownership in the GCC is approximately 20% institutionally owned and the balance 80% held by individuals and private companies – meaning there is a large proportion of retail investor property ownership in the GCC; this compares to about 70% or more institutional ownership in many major cities globally such as Singapore, Hong Kong, London, Paris, New York etc. Our calculations estimate that USD 2 trillion of institutional capital is required to migrate or evolve in the GCC over the next 50 years or so if it is to ever avail the benefits of a greater institutional backbone in the real estate sector.
Given the blockchain and digitalization revolution which is taking place, we consider the best way to migrate such capital into institutional format is to do this through the Evareium symbiotic ecosystem approach, i.e bringing stakeholders in to the model and ensuring a balanced and meaningful model is applied which fits perfectly with the discerning digitalized generation’s ever-expanding needs.
6. What’s the future of your industry?
Prediction #1: Digitalization – of real estate investment. Which will soon replace physical real estate passive investment.
Prediction #2: Value-chain ecosystems – using blockchain and related tech, where the value chain and stakeholder interplay can be handled more transparently and with greater data usage, to enhance substantially stakeholder engagement and benefit.
Prediction #3: Smart buildings – loaded with internet-of-things disruptive blockchain technologies which create and enhance our everyday lives and brings personalized benefits and utility to our use and enjoyment of physical space.