Why Real Estate Tokenization Will Outperform REITs by 2030

Welcome to the first edition of Tokenized Trust Trends - #001

AuthorAuthor

Kevin Beutler & Roman Lewcke
April 28, 2025 • Estimated Reading Time: 7 minutes

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mario In 2019, REITs were the go-to for investors seeking exposure to real estate. But in 2030, they may be obsolete.

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The Rise of Real Estate Tokenization

  • Dubai’s Land Department launched a tokenization project, projecting a $16B market by 2033. Source

  • Platforms like Reental enable fractional ownership, lowering entry costs by up to 60%. Source

  • The tokenized real estate market could hit $1.5T globally by 2025, up from $20B. Source

Blockchain-Powered Property Markets

  • BlackRock backs tokenization to boost liquidity and transparency in real estate. Source

  • The Polymesh blockchain tokenized a $52M Canadian commercial property. Source

  • Luxembourg’s Blockchain Law IV supports tokenization, which enhances legal clarity. Source

The Case Against REITs

Why REITs Fall Short
REITs, while popular, come with significant drawbacks that limit their appeal.

  • High management fees and opaque structures erode returns, with setup costs averaging 3–10% of asset value and timelines stretching over two years (Source).

  • Investors have limited control over asset selection, often stuck with pre-set portfolios.

  • Slow settlement cycles reduce flexibility, delaying access to funds.

  • Smaller investors find REITs inaccessible due to high entry costs.

  • Centralized systems make REITs less liquid compared to tokenized assets.

Enter Tokenization

The New Era of Real Estate Investing
Real estate tokenization uses blockchain-backed tokens to enable fractional ownership, making property investment more accessible.

Smart contracts streamline transactions, ensuring faster settlements and global investor access. Notable examples include the $600M tokenization of a Mayfair hotel and Asia’s first tokenized real estate fund, showcasing the potential for single-asset and fund-based tokenizations (Source).

Key Advantages Over REITs

6 Reasons Tokenization Will Win
Tokenization offers clear benefits, positioning it as the future of real estate investing.

  • Liquidity: Trades settle quickly, reducing friction compared to REITs’ sluggish cycles (Source).

  • Fractionalization: Lowers capital barriers, letting investors buy fractions of premium properties.

  • Transparency: Blockchain ensures immutable ownership records, unlike REITs’ opaque systems.

  • Customization: Investors can tailor rights and dividends, offering flexibility REITs lack.

  • Global Access: Cross-border investing bypasses traditional gatekeeping, opening markets worldwide.

  • Operational Efficiency: Smart contracts automate processes, cutting costs and delays (Source).

Tokenization’s advantages—demonstrated by projects like Dubai’s $16B market projection—signal a shift toward a more inclusive, efficient real estate market, leaving REITs struggling to keep up (Source).

Tokenized Investor of the Week

Waldemar Lerch

I’m a trained dental technician and have always worked in finance alongside it—handling bookkeeping for my wife’s business for 17 years, as well as working in real estate. I’ve been involved in decentralization and blockchain for about four years.

I first discovered tokenization through Kevin and Bali Invest. I’ve been following it for about a year now, invested in the Lovina project, and I’m excited for what’s ahead.

What really inspired me to get involved was realizing that I’ve always enjoyed contributing to both real estate and decentralized projects. Seeing these two worlds come together so powerfully is a giant highlight for me—I truly believe in it.

I only have investments in Bali Invest at the moment, not in any other tokenization projects. I think the concept and execution are outstanding, and I wouldn’t put my money anywhere else at the moment.

I’m looking forward to connecting with everyone and would be happy to support the community however I can!

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