On a residential street in Cessange, a residential district in southwest Luxembourg City, a four-storey apartment building is under renovation. But this isn’t just like any other such building. This is the Clapton Residence (photo), BlocHome’s pilot project for a new approach to home ownership where investors can buy small fragments of the building – the minimum investment is 1,000 euros – through the tokenisation allowed by blockchain technology.
This approach makes it possible to own residential real estate, one of the best-performing investments in many places, with a much lower investment threshold than usual. The building contains eight units and will be ready at the end of the year, explained Jean-Paul Scheuren, one of the founders of BlocHome, the company behind this new property owning solution.
So far, BlocHome has, starting in December 2021, raised 1.7 million euros from 250 “BlocHomers”, or BlocHome investors. Every week, the company gets 25 to 50, sometimes 100,000 euros in new investment. “It’s something that grows with time,” Scheuren said. 
He said that he was confident that the new investment will completely finance the building. “We are definitely on track for fast development.”
Fractionalising ownership
The real estate market in Luxembourg and many other cities is a high end market with very high prices, said Scheuren. “Access to the real estate market is getting more and more difficult for young people and also for less young people.” He said that “fractionalised” ownership is a “good idea” for Luxembourg and for “most developed countries.”
The only person who could live in a unit of a tokenised building is someone who has either bought all of the tokens for that unit or is ready to pay the rent on the part they don’t own to those who do. “So you pay rent according to your ownership,” said Scheuren. “And the more you are owner, the less rent you have to pay.”
Using blockchain and its tokenisation aspect allows “a secure way of transferring property and ownership digitally” with no intermediary, he said. Scheuren said he was pleased that Luxembourg financial regulator CSSF had “accepted” its secondary market solution, a “billboard” powered by Luxembourg blockchain service provider Tokeny. This peer-to-peer solution allows owners of BlocHome tokens to sell them.
BlocHome has worked closely with Tokeny to bring its vision to life. Tokeny has provided a platform that allows BlocHome to save up to 90 percent of the time and cost it takes to onboard investors, with some 800 onboarded in the first month.
Scheuren is quick to underline that prospective BlocHome clients need no prior blockchain knowledge. “They can go on a platform and follow up on onboarding, follow up on an acquisition process, where they simply decide how much they want to invest.”
Democratising access
However, behind the scenes, “there will be the blockchain that is giving them the possibility to become digital and owner of real estate properties, not only being you an owner of some rights, it’s really being owner of property.” He considers it a way to “democratise access to real estate property.”
Scheuren is enthusiastic about the future potential of the technology. “Ultimately, what we are looking for is a solution where it becomes more peer to peer. It’s clear that the traditional financial sector today is an intermediary.”
He emphasised the importance of having a good business plan when getting into blockchain.
“It’s not that we’re going to tokenise all the old businesses,” he said. “There will be new business opportunities that come up, that will perhaps be more consistent with the new customers. So the younger generation of the customers, but also more with the retail customers.”
Retail customer is king
Scheuren said that there’s a lot of focus on institutional customers. “But everybody knows that in the end, you need to be able to reach the retail customer, you have to be able to go quasi directly to the retail customer.” He offered that he gets a lot of interest from people in the financial sector interested in being able to reach retail customers without having to build a complex structure to be able to do so through tokenisation.
In the long term for BlocHome, Scheuren foresees there being BlocHome houses and apartments around the world owned by members of the BlocHome community. This, he said, will enable “housing as a service”. He explained that “you will decide which house you need in function of what is your real need in housing.”
“We say you get access to these kinds of housing possibilities throughout your whole life.” Scheuren said housing as a service would adapt to a person’s life needs. “If I have an opportunity in the States, I want to go to New York, if BlocHome has houses and apartments in New York, you will go and live there.” He explained that the BlocHome client would keep their previous investment, say in Luxembourg. The person moving to New York would simply have to “go to New York and buy in again, in a new investment.”
