Yesterday, Hong Kong-based Link REIT announced a partnership with blockchain startup Allinfra for asset tokenization. The two will initially work on a solar power pilot for the tokenization of photovoltaic (PV) arrays installed on Link’s Hong Kong real estate assets.
Link REIT is the largest real estate investment trust in Asia with a market cap of about $24 billion.
Asset tokenization has been explored in the real estate space previously. But what makes Link’s project different is the application of blockchain for creating a distributed energy resource (DERs). With tokenization of the solar project, blockchain can record the financial effect, ownership, and the associated environmental impact. The tokens will be stored on the Ethereum blockchain with Allinfra providing the technology support.
“We believe this represents a significant moment in time for Allinfra and the wider adoption of the tokenization of assets and the application of blockchain technology,” said Dave Sandor, Co-founder and CEO of Allinfra.
For Link REIT, blockchain can provide higher liquidity of assets, plus the automation of energy management and sales within its real estate portfolio. An immutable record of the data can additionally drive efficiency and more reliable insights. On the other hand, the use of blockchain for a solar project supports the environmental, social, and governance (ESG) initiative of the company.
“Link REIT has an extensive and ambitious ESG program. We are exploring the potential of blockchain technology to develop innovative and robust ESG solutions in areas such as carbon reduction and data management,” said Calvin Lee Kwan, General Manager, Corporate Development & Strategy at Link REIT.
While Link REIT is focusing on using blockchain for energy and sustainability, other property companies are exploring tokenization. This paves the way for small investors to enter a market dominated by big money. Earlier this month Seoul’s SK Securities and blockchain firm Kasa Korea announced a partnership for real estate tokenization. The two are building a blockchain platform to issue digital asset-backed securities (DABS) with real estate as the collateral.
Last week, US-based blockchain firm AssetBlock launched a blockchain platform for real estate trading using tokens. In the first phase, AssetBlock tokenized $60 million of hotel properties of Lodging Capital Partners.