Brickblock, a technical service provider based in Berlin, has tokenized a residential real estate vehicle carrying a property in Wiesbaden, Germany. It is the first transaction in the EU for which shares are represented on the blockchain.
Today, Brickblock achieved a significant milestone by tokenizing a real estate vehicle carrying an approximately €2 million property in Wiesbaden, Germany. The sale was exclusive to eligible investors.
It is the first transaction in the European Union for which real estate shares are registered as digital tokens on the blockchain, a process known as ‘tokenisation.’ Tokens entitle the token holder to the economic benefits of the underlying real estate asset (e.g. dividends from rent, interest, principal distributions).
While the real estate industry has been slow to transition from paper-based to digital processes, Brickblock’s proprietary technology and legal framework have provided a real use case to accelerate this shift.
“Blockchain is at the forefront of technology and has the potential to create a more efficient and globalized financial system. I am excited about the future impact of tokenization,” said Brickblock CEO Jakob Drzazga. “Once a property, real estate fund, or financial instrument is tokenized, the real advantages come into play: subsequent transactions are instant, nearly free of charge, and, if done properly, without counterparty risk. This is an absolute game-changer for the industry.”
Axel von Goldbeck, Partner at the global legal business DWF, added: “The Wiesbaden transaction is further evidence of the great flexibility of tokenization and its potential to make illiquid assets liquid. Brickblock’s approach in tokenizing various financing instruments – in this case tokenizing SPV share participation – reflects the broad variety of applications for tokenization in the real estate market.”
One of the next projects on Brickblock’s horizon will see Peakside Capital, a leading real estate investor in Germany, utilize the company’s technical infrastructure for an AIFMD compliant, income-focused real estate fund targeting German properties.
Brickblock is a business-to-business (B2B) funds-as-a-service technology platform that provides fund managers with blockchain-based investment solutions. These solutions include online know-your-customer (KYC), investor clearance, data rooms, reporting, auditing, and compliance, as well as automated clearing registries and payouts. Managing these tasks allows Brickblock’s clients to save time, save money, and focus on their core competencies: sourcing capital and new investments.
Brickblock has offices in Berlin, London, and Gibraltar. The team – led by Jakob Drzazga (Founder & CEO), who has an extensive background in entrepreneurship and real estate transactions – has strong experience in scaling and delivering growth businesses for companies such as Barclays Bank, Verivox, and McKinsey. This is complemented by sector experience in fintech, banking, and wealth.
Axel von Goldbeck is a Partner at the global legal business DWF with deep knowledge of the regulatory framework of the real estate industry. He is a former managing director of the German Property Association (Zentraler Immobilien Ausschuss), representing major German real estate fund managers. Axel is on the Brickblock Advisory Board since June 2017.