As the sector is expected to experience growth, implementation of blockchain can bring in efficiency and transparency
New Delhi, June 01, 2022: The adoption of blockchain technology in the Indian real estate sector could further enhance the momentum of growth and give a much needed boost to the economy.
The real estate industry in India is on an upswing. The sector is showing signs of revival and is expected to experience growth across key segments including office, residential and I&L.
The current complex procedures that involve multiple transactions, involvement of different parties and detailed due diligence are contributing to the increased appetite for the implementation of blockchain technology in the real estate sector.
Kiran Paturi, CEO, Brugu Software Solutions, a blockchain solution provider, is of the opinion that with the implementation of blockchain technology, India will be able to achieve efficiency, accuracy and transparency in the complicated processes in real estate. Kiran says, “Blockchain technology is based on highly secure and efficient distribution of digital data where entries are permanent, transparent and searchable, thereby making it a perfect match for the real estate sector.”
A recent report, ‘Market Outlook 2022: Reigniting India’s Growth Engine’’, released by CBRE South Asia points to a largely resilient Indian real estate sector despite the continued cyclical upswings and downswings of the pandemic.
According to the report, India will remain the ‘flag-bearer of growth for the world economy, albeit with a few downside risks such as growing inflationary pressures’.
While within the office space segment there is expected to be a positive demand side momentum, leasing activity will remain strong and the next-gen logistics facilities could dominate the supply pipeline. The report also pointed out that a growth in the retail sector thanks to pent-up demand across consumption categories and partnerships between digital and traditional retail brands.
The report also identified blockchain as one of the six technologies that will dominate the real estate sector in 2022. The others include SaaS, Artificial Intelligence, Internet of Things, Robotic Process Automation and Virtual / Augmented Reality.
“The blockchain technology, using its open and distributed ledgers, can change the way we search, invest in and own properties. Today we have smart contracts that can be implemented at every level of the existing system, thereby automating the process, eliminating middlemen, and enabling secure transactions,” says Kiran.
While the world’s first real estate transaction using blockchain was executed in 2017, the demand for tokenization of real estate assets has been gaining ground. The digitisation of real estate assets as non-fungible tokens (NFTs) can enable new ways of property ownership and transactions.
“A protocol manages how new edits or entries are initiated, validated, recorded, and distributed. Cryptology in blockchain replaces third-party intermediaries while complex algorithms assure the integrity of the digital information,“ adds Paturi.
According to him, the benefits are multi pronged starting from ways of listing to search, management of data and most obviously secure transactions. “The very fact that the implementation of new technology can enable transparent and real time information of all transactions can give a massive boost to investor confidence and further cross border investments.”
According to a report published on India Brand Equity Foundation (IBEF), the Indian real estate sector is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. Moreover, it is also expected that by 2025, the industry will contribute 13% to the country’s GDP.
Meanwhile, early entrants and adopters are expected to not only benefit the most but lead the way forward. “We see a growing demand for development and implementation coming from both international financial institutions and real estate management firms. Both property mortgage and financing segments are expected to see their businesses being disrupted and the process has already started,” says Kiran.
Corporate Comm India (CCI Newswire)