ISToken: The Digital Revolution of Fractional Ownership & Real Estate Tokenization Model in Turkey

Göksu, Sabuncuolu and Kerem Yavuz Arslanli

ERES from European Real Estate Society (ERES)

Abstract: Real estate access has become increasingly challenging due to high property costs and financial difficulties in Turkey especially major cities like Istanbul.These limitations have restricted the opportunity for individual and small-scale investors to participate in large real estate projects. However, solutions such as fractional ownership concepts and real estate investment funds have emerged to overcome these challenges and democratise real estate investments.Fractional ownership divides large properties into smaller shares, offering investors the advantage of acquiring these properties at a lower cost. This model enables individuals and small-scale investors to own real estate assets with smaller amounts of capital. Another effective method that has gained prominence alongside these solutions is real estate tokenization.Real estate tokenization involves converting properties into digital assets, allowing investors to become property owners with more minor, fragmented shares. This facilitates participation in real estate projects with smaller amounts of capital, and investors can hold property ownership through digital tokens. Tokenization manages these transactions transparently and reliably, providing a faster and more cost-effective investment process.To democratise real estate access in Turkey, various financial tools, combined with solutions brought by the digital revolution, offer investors a broader and more effective range of investment opportunities. As a result, the real estate sector becomes more accessible and diversified, leading to healthier growth for individual investors and the industry.In this research, existing fractional ownership practices in Turkey are examined, and solutions for the challenges of regulating tokenisation are proposed by referencing various applications of real estate investment funds. A new model of real estate tokenisation, named 'ISToken' (Istanbul Token), is introduced, offering technological, legal, and financial solutions to make the real estate sector more accessible and liquid.

Keywords: DLT; Smart Contract; STO; tokenization (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2024-01-01
New Economics Papers: this item is included in nep-ara, nep-pay and nep-ure
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