Structural Review and Performance Evaluation of Real Estate Tokens as a New Era Financial Product

Berke Bayhoca and Kerem Yavuz Arslanli

ERES from European Real Estate Society (ERES)

Abstract: Security tokens, based on blockchain technology, are rapidly becoming widespread as new-era investment products. Real estate tokens have long stood out as one of the most popular of these tokens. The underlying reason is that the real estate industry is associated with low liquidity and lengthy and expensive transaction processes. Tokenization platforms and real estate market experts believe tokenization will solve many problems in the traditional market. The products that will emerge through tokenizing real estate assets can increase liquidity by removing high entry barriers in the market and creating a secondary market where intermediaries are minimized. Theoretically, this technology, which can provide secure access to a broad market in a short time, can also mean a new platform for both debt and capital increase. This thesis study examines the tokenization of real estate assets with both quantitative and qualitative approaches. Within the scope of the study, the structure of real estate tokens as financial products were examined, and their similarities and differences with traditional products were discussed. Moreover, an empirical analysis has been made by comparing the financial performance of real estate tokens actively traded in the secondary market with specific reference indices. The results of this study showed that real estate tokens have higher returns than selected market portfolios but have higher risks than traditional market products.

Keywords: blockchain; Portfolio Management; Real Estate Tokens; tokenization (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2023-01-01
New Economics Papers: this item is included in nep-pay and nep-ure
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