This New Platform is Like a Stock Market for Real Estate
“Everything is going digital—I think real estate is not an exception,” says Eli Becislao, COO of C Estates Inc., a real estate tech startup that’s gearing to disrupt the real estate market.
C Estates is an open-access online platform that connects real estate buyers and sellers and facilitates their transactions as they trade property like stocks. Unlike traditional real estate businesses, properties on C Estates will be tokenized, allowing investors to purchase a fraction or the whole of any property in the Philippines.
“C Estates was conceptualized because of the slow and rigorous process of buying and selling properties in the Philippines,” explains Teru Sumida, CEO of C Estates Inc. “The idea behind C Estates is to make the process of buying and selling less complicated for investors.”
Despite being a trillion dollar industry, real estate still remains one of the most illiquid markets in the world. The market is still hampered by high entry fees, high transaction rates, slow processes, a lot of administrative work, lack of transparency, and risk of fraud. The entire process can be considered tedious, taking up time and money as buyers must also pay broker fees on top of Capital Gains Tax.
C Estates eliminates these obstacles by compressing the process into a convenient system for all parties involved. By virtue of being an online tokenization platform, parties will be privy to a wider audience, fast transactions, easy cross-border transactions, liquidity of assets, dynamic pricing, and an online medium for administrative procedures to take place.
The features of the C Estates platform include buying, selling, renting, listing, time sharing, land banking, and crowdfunding. The platform will cater to everyone from brokers, buyers, sellers, property developers, crypto investors, property managers, banks, and the government.
By fractionalizing property into small portions, C Estates has essentially taken the form of a stock market for real estate.
“This will provide liquidity to the market, because we know real estate is a very illiquid asset,” says Gary Hablero, Managing Director of C Estates.
Gary Hablero, Managing Director; Teru Sumida, CEO; Quintin Pastrana, moderator; Eli Becislao, Chief Operating Officer; Marco Mejia, Chief Technology Officer
How do tokenization and blockchain technology work?
Tokenization isn’t new to financial institutions. It's been around for a while as representations of monetary assets. Tokenization relies on computational logic in which “sensitive data is converted into non-sensitive information,” as per Marco Mejia, C Estates' Chief Technology Officer.
Data is protected with an algorithmically generated number, or token, which can protect users from credit card fraud as users' real information is never exposed.
It’s often paired with blockchain technology, a digitized ledger and database that ensures efficient transfer of property ownership and eliminates human errors from its records. The database is made publicly available and tamper-proof. Becislao explains that any tampering is automatically rejected by the system.
“Blockchain technology will promote more transparency and more efficiency in any kind of transaction. This technology is best matched for the real estate industry,” Sumida explained.
This is not the first time tokenization and blockchain technology has been adopted by a real estate company, but it may be the first to be streamlined to a Philippine audience. Tokenized property is already seeing growth abroad, finding markets in New York and London, and Manila may be next on the list.
“Tokenization is paving the way for a new forefront in real estate development,” says author and broker Ryan Serhant.
When will it launch?
C Estates currently has several hundred property listings on the roster, all of which are commercial or residential condominiums. Their focus is currently on properties under the Condominium Certificate of Title (CCTs) as these properties are open to both local and foreign investors. Becislao notes how they’ve seen a high demand from Chinese, Japanese, and Korean nationals.
“Tokenized properties can either be transacted using traditional payment such as credit card/debit card, bank transfer or wire transfer. In addition to these methods, property owners can also opt to receive payments through cryptocurrencies such as Bitcoin (BTC), Ether (ETH) among others,” Sumida said.
Eventually, the real estate tech startup plans to shift its attention to Transfer Certificate of Titles (TCTs), which are exclusive to Filipino nationals, and to provide mortgage and home loan financing services to its customers. The company also looks to expand its business to nearby countries, such as Malaysia and Thailand, in preparation for the ASEAN integration.
C Estates will hold its soft launch at the end of July, marking the start of a dry run in which users can use paper money to participate in property listings and virtual trading and become familiar with the platform. It will officially launch in the fourth quarter of 2019 in which buyers, sellers, and brokers can fully take part in C Estates’ real estate stock exchange.