NFT to represent right to access title to a Luxury apartment in One Blackfriars Tower.
TokenHouse, a prop-tech/blockchain start-up, is the first London-based company to provide landlords and developers with the ability to wholly convert real estate into digital assets in the form of Non-Fungible Tokens (NFTs) that can legally transfer the beneficial rights and the right to access the title of the underlying asset to the NFT holder. This innovative solution has the potential to unlock numerous benefits, including streamlining UK real estate transactions, which can be rather arduous and archaic.
TokenHouse recently completed a first-of-its-kind real estate transaction using NFT and distributed ledger technology, converting a multi-million-pound prime central London residential property into an NFT. The NFT issued by TokenHouse contains a smart contract which legally grants the NFT holder access to the beneficial rights and the right to access the title of an apartment in One Blackfriars Tower, valued by BNP Paribas at a market value of £6.5 million, as at June 23rd 2022.
“TokenHouse makes it easy for property owners to convert their real estate assets into NFTs, which is the first step in the process of enabling on-chain peer-to-peer property transactions,” according to TokenHouse Co-founder and COO Ben Hur Baraki. NFT holders may also be able to borrow against their assets via any DeFi exchange that accepts NFTs as collateral. Given that most DeFi providers offer favourable terms compared to traditional lenders, this is another aspect of the TokenHouse offering that property investors may find appealing.
“This exciting development has the potential to disrupt the real estate industry. Our proprietary process and transaction structure could drastically streamline the transaction process and should enable greater exposure to the UK real estate market at a time when investors are seeking alternative means to achieve returns on investment,” says Hur Baraki.
Legal adviser Martin Bartlam, Partner at DLA Piper, adds, “This is a potentially seminal moment for the real asset market from which new markets and investment will arise. The transaction and the asset holding structure deployed in the transaction benefitted from the bringing together of longstanding English law principles with advanced technology. The transaction structure is a good example of British businesses being at the forefront of the digital asset and global financial markets.”
The NFT issued via TokenHouse is held via a trust structure managed by Truva Group. “This provides greater security for Tokenhouse NFT holders compared to typical NFTs, marking this as a breakthrough for the digital asset market,” says Hur Baraki.
According to Alper Deniz, CEO at Truva Corp, “The novel trust structure proved crucial to establishing the link between real-world assets and digital assets, and we expect further interest in unlocking this technology for a greater range of investors.”
The innovative structuring and documentation of the TokenHouse NFTs mean that TokenHouse may be able to offer clients, including many international investors, a new way to access the UK property market in a digital asset form.
Hur Baraki says, “The arrival of TokenHouse NFTs or asset-backed NFTs into the UK market is a true milestone for the digitisation of the industry. Being the first to offer this conversion service to landlords, TokenHouse is at the forefront of innovation through secure digitisation of property assets.”
TokenHouse is now converting an additional 12 prime central London residential properties in the recently completed HKR development in Hoxton. The combined value of the properties exceeds £100 million.
“We are delighted to have launched this ground-breaking new service and are excited about the potential opportunities it will provide our clients and the wider industry in general. So far, we have seen strong interest from investors and have an established pipeline of properties with a valuation north of £100 million, so things are looking very positive for TokenHouse.” says Hur Baraki.
The NFT issued by TokenHouse legally grants the NFT holder ownership of a luxury apartment in One Blackfriars Tower.
About DLA Piper
DLA Piper is a global law firm with lawyers located in more than 40 countries throughout the Americas, Europe, the Middle East, Africa and Asia Pacific, positioning us to help clients with their legal needs around the world.
About Truva Corp
Truva Corp is a boutique professional services provider offering trustee services, company administration and other advisory and consultancy services to asset managers, arrangers and corporations operating in the capital markets.