A Brazil-based blockchain and real estate project has recently announced its launching of a real-estate tokenization platform – Kodo Assets. Watchful of the demands of the real estate market and the evolution of blockchain technology, Kodo Assets, a real estate tokenization platform – which arrives in the market to democratize the access to real estate investment, help increase liquidity of such assets and reduce the barriers of access to this market, be it due to high transaction costs or red tape – , announces its first real estate tokenization project in Brazil.
Tokenization allows properties to be broken down into countless, small digital parts, which can be sold to many people for a relatively low unit price, thus democratizing the access to this type of investment. With tokenization, it’s possible to invest more accessible amounts in exchange for tokens of real estate assets. The real estate token is a low risk investment when compared to stocks or crypto assets and has a lower entry level cost, as the minimum ticket cost for investment is lower when compared to the real estate market. The token market works globally, 24 hours a day, 7 days a week, and it has been estimated that the liquidity of the KODO1 tokens is considerably higher than investing directly in traditional real estate units.
The first property to be tokenized by Kodo Assets is a commercial property located on Faria Lima Avenue, a prime area of the city of São Paulo, and its total area is of 1,144.52m², with BOMA gross area of 552.58m², private area of 473m² and common area of 671.52m². The entire complex is currently rented by a large multinational.
The main revenue expected to be received from this property is rent. The yearly profitability expectation for the token is, with all discounts included, 6% until June 2023, and 6%+ annual adjustment of the rent using IGPM. The resulting value after fees will be distributed as dividends to KODO1, which emits the tokens that represent the inherent rights to the property. To do so, Kodo Assets will take care of the distribution of the revenue to the owners of each token to their own wallets, considering the participation of each in this venture. The payment of the proportional profits for the token holders will be done using Stablecoin USDC, the stablecoin holding the highest credibility and transparency in the crypto market. The payment will be made in the same wallet that holds the KODO1 tokens at the moment of the distribution.
“The owner of the KODO1 token will have the right to receive dividends from the rents of this property, proportionally to his or her participation in the tokens versus the total number of tokens issued by the project and an eventual sale of the underlying real estate, which can generate an interesting capital gain”. – summarizes Ciro Iamamura, the CEO of Kodo Assets.
The company will issue a total of 25 thousand tokens for this property, each sold for $140.00, besides the KYC/AML verification costs, which amounts to $13 for a single person, or $25 for a legal entity. The minimum purchase value is 1 KODO1 token, and there are no limits to how many can be purchased. The total offer value is US$ 3,500,000.00. The sales are expected to happen around November 2022.
Through blockchain technology, the idea is that the company can collaborate with this revolution in the real estate sector, allowing investors to purchase real estate in a fast and safe manner, without the red tape and high costs of the traditional market, and having access to different markets all over the world.
“We are talking about global access to markets that, until now, were local, limited by geographic location of the properties or because they were available only for qualified investors.In this sense, digitizing real estate can facilitate the access to these investments, as they become available for people all over the world. We believe that asset tokenization can be fundamental to revolutionize this market all over the world”, highlights Ciro.
The property, located on Faria Lima Avenue, is just the first project by Kodo Assets in Brazil. According to Helena Margarido, advisor for Kodo Assets, there is a growing and justifiable demand for real estate in São Paulo. “The average price per square meter in downtown is around US$2,613.042. However, if we consider some of its sister cities, we can find, for example, Chicago, with an average price of US$4,137.144, and Lisbon, with an average of US$5,239.255. Because of this, it is plausible to believe that the value of real estate in São Paulo is (very) underpriced. In other words, believing in an ever growing appreciation of real estate for this city in the next few years is a natural conclusion when we see how important São Paulo is in the world, and average prices in similar cities”.
To have access to the Tokens, the investor must access Kodo Assets’ official website, fill out a personal information form, present documents and go through the facial recognition process. After the KYC/AML (know your customer and anti-money laundering) verifications and having the registration approved, the user can purchase as many KODO1 tokens as he or she wants. Payment can be made in USDC, USDT and BUSD, as long as they are made in networks that support EVM. Token transfer will happen as soon as the tokens are at disposal, and will be sent to the same wallet where the resources used to pay for the token came from. For KYC/AML reasons, under no circumstances will the token be transferred to a wallet that has not been submitted to the verification process.
Whoever holds the token has access to all the information regarding it stored in blockchain and available for inquiry, if needed. Even if the asset is sold hundreds of times, it is possible to track each transaction and find the current owner easily. This feature brings transparency and reliability to the transactions.
“Using smart contracts renders intermediation to negotiate and register the tokens useless. Besides reducing costs for not needing a third party, the whole process becomes much more agile and efficient. In this sense, tokenization can increase the efficiency and drastically reduce the costs of each transaction, TOKEN which strengthens the market as a whole”, says Ciro Iamamura.
For believing that tokenization can solve the biggest problems of the Real Estate market, Kodo Assets was created. Through tokenization, the objective is to democratize investors’ access to the real estate market, help increase liquidity of such assets and bring down the barriers to access different markets, be it because of high transaction costs or red tape. The company’s tokens will be created and distributed according to the Bahamas legislation which, given its nature, classifies them as security tokens. That way, as they are considered to be securities, the process is subject to an intense and thorough regulatory process. The Kodo token will be issued using a smart contract platform by Polygon and granted to its holders equal parts of the property rights, proportionally to how many tokens were purchased. Polygon is used to issue the tokens because it is one of the most promising blockchain infrastructures, with a large community of developers, companies and organizations dedicated to strengthen and mature the technology and its applications.