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Surprisingly, one of tokenization’s least accredited benefits is cost reduction. When you remove the layers of administration, brokers, registrars, and legal back and forth, you leave more money on the table. Meaning higher net yields for the asset owner and better returns for investors.
As of August 2025, there are 3 main ways a property can be tokenized. Bonds. SPVs, and most recently, Title Deed tokenization, piloted by the DLD land project, starting earlier this year. But what are the key differences, the pros and cons, impact on cost and how/if these options will each play a role in the future of tokenized real estate?
Bonds provide a simple and comprehensive process of tokenizing property. Investors lend money to a property project. In return, they receive interest payments over an agreed period, and the principal back at the end. The blockchain part handles the admin, e.g. recording ownership, monitoring transfers securely, all without excessive amounts of paperwork.
Cost Impact:
Tokenization can cut out certain intermediaries, such as traditional paying agents, custodians, and manual certificate registrars, because the blockchain manages ownership records and coupon payments automatically. That means lower admin costs, faster settlement, and more of the project’s returns staying with the asset owner and their investors.
Investor Return Profile:
Investors can usually expect a healthy fixed return, often in the 8–12% annual range. Investors are not betting on property prices, but on the borrower’s ability to make the payments. If the property value rockets, good for them, it doesn’t change what you earn. In turn, if it tanks, you’re protected unless they default.
Liquidity & Exit:
Most bond tokens are “hold until maturity.” Some platforms offer early exits through regulated secondary markets, but liquidity windows can be infrequent, and buyers may be limited.
Will Bonds Remain Important?
Bonds give predictable returns, are easier to structure across jurisdictions, and can open up new debt funding channels for developers. In a tokenized future, bonds will still be the go-to for income-focused investors and projects needing stable, regulated funding structures.
An SPV is a separate legal entity created solely to own a specific property. Investors buy equity in that SPV, providing them with indirect ownership of the asset. The token is their digital share certificate, which makes ownership easier to track and transfer (within the platform’s rules).
Cost Impact:
An SPV still needs lawyers, tax advisors, corporate administration, and often a property manager. But tokenization streamlines onboarding, automates record keeping, and simplifies secondary sales. These efficiencies cut transaction friction and admin costs, but the underlying SPV overheads still exists.
Investor Return Profile:
Investors receive a share of the rental income and participate in any capital gain or loss when the property is sold. Performance is tied directly to the real estate asset, for better or worse.
Liquidity & Exit:
Most SPV tokenization platforms run controlled resale windows. Investors can offer their shares to other investors, usually at prices linked to an updated property valuation, which are often controlled by the platform. There may be a minimum holding period, with six to twelve months being common, and investors can only sell if there is a willing buyer.
Important Note:
In some cases, these are more akin to a crowdfunding model and aren’t blockchain tokens investors can move to a personal wallet or sell on a public crypto exchange. They are internal records in a regulated platform’s system, subject to local securities rules.
Will SPVs Remain Important?
SPVs offer flexibility. You can wrap almost any type of property into this structure, manage it under clear corporate law, and attract global investors while ring-fencing liabilities. They’re proven, understood by regulators, and will remain a workhorse structure for tokenizing both single assets and portfolios.
In many ways, title deeds are the cleanest type of real estate tokenization, with direct, legal ownership of the property, recorded both in the government land registry and on the blockchain. No SPV in between. The investor’s name (or wallet address) is on the title. This structure eliminates trust gaps and offers the strongest possible legal protections. Ownership is indisputable, enforceable, and in due course is likely to be highly liquid.
Cost Impact:
This model has the most powerful cost-reducing potential. If the land registry recognizes the blockchain record (as in the DLD pilot), there’s no SPV, no share registrar, and many conveyancing steps disappear. Transfers can settle in minutes, with drastically reduced legal fees and admin costs.
Investor Return Profile:
Investors earn a share of any rental income and participate fully in any capital gains or losses on the property. Investor rights are the same as any traditional property owner because they’re written into the official registry.
Liquidity & Exit:
In theory, title deed tokens could be traded instantly, peer to peer, 24/7. In practice, most jurisdictions still require regulated platforms to handle transfers for compliance purposes. One caveat here is stamp duty. For example, with the DLD pilot the usual 4% stamp duty has been halved, but that’s still a 200 basis points charge on every sale.
In March 2025, the Dubai Land Department launched a pilot, with each token tied to a legally recognized fraction of a title deed. UAE nationals were able to invest as little as AED 2,000 ($545), paying in dirhams. The average investment was a little over AED 10,000, and over half of the investors were new to real estate investment in the UAE.
• Fully integrated with the land registry: Every token transfer updates DLD’s official system in real time, keeping the blockchain and the legal record perfectly aligned.
• Government backed: This is the legal ownership, backed by the land registry.
• Fractional access: Investors can buy small portions of high value assets without forming a company or SPV.
• Regulatory oversight: DLD handles all compliance, KYC, and AML checks at the point of purchase.
This option is currently limited to UAE nationals, and there are several hurdles still to be overcome, but it has lit the torch in terms of redefining property investment by offering instant settlement, global reach, iron-clad ownership rights, and significantly higher net returns due to minimal transaction costs.
Bonds deliver predictability, SPVs deliver flexibility and global reach, and title deeds deliver the purest form of ownership. All three cut costs, and all three will have a permanent role in real estate tokenization’s future. Bonds will keep income-focused investors happy and give projects reliable debt funding. SPVs will remain the adaptable, regulator-friendly structure for wrapping complex or cross-border assets. Title deeds will push the frontier, eventually making high-value real estate as easy to transfer as sending an email. The DLD pilot shows what’s possible; the rest of the industry will decide how fast we get there.
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