Bringing lower-cost capital with significant upsides and security to lenders.
For years, India has been predicted to as the next business hub. Whether it’s the new automobile manufacturing or real estate center, the world’s eyes are looking up for India. UAE, as one of the great admirers, is focusing on strengthening its traditionally bilateral relations with India. In 2020.
global investors have invested US$ 5 billion of investments alone and have seen the participation of marquee investors like Blackrock, Oaktree, Bain Capital, Capital Land, Sumitomo, Meritz, etc.
However, the capital has been focussed on the larger cities and is still inadequate to fill the funding requirement in India. VC Circle estimates the real estate funding gap in India at US$ 100 billion.
Indian real estate industry is in the spotlight
The funding gap is most felt in the 104 Tier 2 cities in India, already representing 75% of India’s aggregate GDP. Real estate activity in Tier 2 and 3 cities is experiencing the highest growth rate, especially in the smaller scaled projects.
Landor is focussing specifically on this segment by tapping into alternate funding available from the large capital base within Decentralised Finance (DeFi) and crypto-assets of US$ 2.2 trillion, globally.
Offering lending with an average deal size of US$ 150 thousand per project and with tenures of less than six months to fill the funding gap in Tier 2 and Tier 3 cities. The low value, high volume, and fast turnaround of projects offer risk mitigation to lenders.
Ensuring a high debt scenario for a single property developer like Evergrande is unlikely to happen. Additionally, the lending is secured against land collateral, held via a Non-Fungible Token (NFT) on the blockchain.
The transparency and speed of a blockchain-based approval system ensure that the property developers are able to access lending at a faster time frame and the cost of capital is lower than what is available locally. Thus LandOrc is enabling the reduction of the cost of housing and providing a growth driver to the real estate industry.
The LandOrc team on-ground has deep experience in real estate and finance to ensure that the lending process is done within local regulatory frameworks and is scalable over time.
This tokenization of lending allows for global investors to participate from the comfort of home to achieve up to 20% APR (annual percentage returns) on the LandOrc platform.
The real estate industry globally has been facing a funding gap despite all the governmental quantitative easing efforts during the pandemic. Most of the benefits from the easing have been targeting end consumers and individuals and not the businesses.
This has further accentuated the funding gap already faced by real estate developers prior to the pandemic.
LandOrc goes global
LandOrc is in the process of replicating the same lending model in other markets like Australia, the United States, Sri Lanka, Canada, etc. Focussing on high-interest segments.
The World Economic Forum had estimated the size of tokenization of assets to reach US$ 24 trillion by the year 2027. The rise of technologies like blockchain has fast-forwarded the growth of tokenization, for any asset or financial instrument.
This impact is seen in the growth of NFT marketplaces that have reached US$ 2.5 billion in sales focussing primarily on the art, entertainment, and gaming sectors.
This offering allows individuals and companies involved in DeFi to diversify their investments and include assets that are linked to real-world assets like land and real estate. Thus ensuring greater security for their investments and compliance to the increasing regulation seen within the crypto environment.
Based on an expected APR of up to 20% the LandOrc utility token LORC is expected to grow by three times based on independent analysts using the dividend discount model.
LORC tokens have high liquidity and offer secondary market exposure having been already listed on Uniswap and with an upcoming listing in large centralized exchanges like Coinsbit and Bitforex scheduled in October, and a few more in upcoming months.