In a bold move toward upgrading the real estate sector, the focus has shifted from mere tokenization to building a sustainable ecosystem. The goal is to enhance transparency, inclusivity, liquidity, and 24x7 accessibility in real estate investments, distinguishing them from the volatile and fast-paced nature of stock markets. Real estate, infrastructure, and gold assets are traditionally held to hedge against market volatility and economic downturns, making them unsuitable for platforms like stock exchanges.
Recognising the importance of all stakeholders in this shift, RealDom ~ Pinvest.Exchange is collaborating with National and International Financial Institutions and regulators to elevate governance standards, ensuring transparency for all investors. It is the First Global Property & Infrastructure Investment and Trading Exchange entity. Unlike private tokenization platforms that primarily cater to strategic exits for primary asset owners, this initiative also aims to benefit small investors.
Historically, real estate has been a preferred investment for those who can afford it, often viewed as a means of self-residence. Studies across countries and industries reveal a strong correlation between a sophisticated financial system and economic growth. Nobel Laureate Joan Robertson famously noted in 1952 that "where enterprise leads, finance follows," highlighting the integral relationship between economic development and financial arrangements.
The Indian property market is projected to quadruple in the next 6-8 years, with new infrastructure developments requiring around USD 4.5 trillion to support sustained growth. By 2036, India aims to become the world's second-largest economy.
Recent adjustments to REITs regulations now accommodate smaller asset owners. However, it is important to acknowledge that Indians, known for their conservative investment nature, often use real estate to hedge against capital market volatility. Despite the tripling of registered demat accounts in the past five years, the actual number of investors still needs to grow. Though REITs have been around since the 1960s, they account for less than 2% of global real estate asset valuations even after six decades.
Small investors have seen limited returns from REITs, while real estate developers and asset managers continue to seek diverse funding options for new developments. Sectoral restrictions on bank lending further complicate the landscape. Despite this, Indians invest approximately INR 20 lakh crore annually in bank fixed deposits, yielding minimal inflation-adjusted returns. The total fixed deposits across the economy amounted to INR 188 lakh crore by the end of last year.
This shift towards a sustainable real estate ecosystem promises a brighter, more stable future for investors, leveraging transparency, governance, and accessibility to create a more inclusive and strong market.
