Investors have the potential to earn returns exceeding 12% from an investment that merges real estate and cryptocurrencies. MAG Real Estate Development, boasting a portfolio worth over $5 billion, has partnered with Mantra, a prominent blockchain network focused on tokenizing real-world assets. Their objective is to tokenize MAG’s real estate projects, aiming for a total value of up to $500 million.
Real Estate and Cryptocurrencies
Combining one of the safest assets, real estate, with one of the riskiest, cryptocurrencies, might seem unusual, but it’s not the first time such projects have surfaced in the UAE. In an interview with CNN Business, Talal Moafaq Al-Gaddah, CEO of MAG, explained that the main goal of their project is to simplify property purchases using cryptocurrencies. He pointed out that opening a bank account can be time-consuming and involve numerous transactions, whereas setting up a digital wallet can be done in hours or less.
Their partnership will kick off with projects under the Keturah brand, including Keturah Reserves in Meydan Dubai and Keturah Resort in Dubai Creek Side. They plan to introduce a real estate financing treasury on Mantra’s first-tier blockchain network, tailored to meet regulatory compliance standards. The total value of these tokenized project transactions is expected to reach $500 million.
Investors in this treasury will receive returns in stablecoins and “OM” tokens from Mantra. They anticipate stable returns of around 8% annually in stablecoins, plus a speculative component ranging from 4% to 5% in Mantra tokens, which are exposed to market fluctuations.
Al-Gaddah also predicts that the value of Mantra could rise from approximately $0.80 today to $2 or $3 in the future.
Additionally, they plan to bolster initial treasury security with a $75 million ultra-luxury mansion located in Ritz Carlton Residences Dubai Creek Side within the Keturah Resort. MAG will also provide credit guarantees, enhancing investor protection and fostering innovation in real estate investment through tokenization.
Cryptocurrencies and real estate: Is this an opportunity or a risk?
John Patrick Mullin, the Founder and CEO of Mantra, explained in a special interview with CNN Business that MAG’s guarantees make this investment relatively secure, ensuring a minimum of 8% return. He noted that while Mantra’s price is volatile and could decrease, it has experienced significant growth of over 240% in the past two years. Mullin suggested that this upward trend may continue, potentially pushing returns beyond the current 4% to 10% range.
In response to a question about his expectations for the real estate sector in the UAE, Talal Al-Gaddah emphasized the factors contributing to stability and growth. He highlighted Dubai’s security, stability, and its strategic location near densely populated countries with a combined population exceeding 2 billion people. Al-Gaddah expressed confidence that these factors will maintain and potentially enhance the current growth momentum. He reaffirmed the UAE’s ongoing development path, driven by the annual construction of at least 350,000 housing units, indicating optimism for continued growth in the future.
