The Evolution of Commercial Real Estate
One of our Commercial Real Estate Specialist has also a keen interest in all things Blockchain. He tells us how one will indirectly help the other.
We often hear that the Maltese Real Estate Industry is booming. Within this sector there is a smaller niche that is experiencing unprecedented growth which is less often talked about. The Commercial Real Estate market (CRE) is currently enjoying the fruits of an expanding economy. A large number of foreign companies have set their eyes on Malta to establish their operations here for number of good reasons. Malta's international reputation has enjoyed a boost over the last decade with a steadily rising GDP rate (over 6,5% in 2017), an unemployment rate at an all time low and a pro-business approach, offering advantageous tax and patents regime.
IGaming, Finance, Pharma and Biotech industries are flourishing due to this operational climate which in turn is creating a welcoming uplift in demand for commercial property of all kind. International chains operating in retail and hospitality are setting up shop in Malta which would usually require larger stretches of land. In fact, development such as the upcoming Hard Rock Hotel in St Julian's and The Quad Business Centre are being developed on a neverseen before level. Altogether, this is raising the bar in therms of design and architecture. This can be seen from the concepts adopted by the number of tower buildings sprouting cross the island. The new way of looking at architecture is being implemented not only in residential buildings but also office blocks, with an increased used the glass structures to make the best use of natural lighting. In the CRE industry, we can now clearly identify between office space and prenium office space. Employers are no longer satisfied with providing a desk and a PC for their staff to work from but request a space that engaging, creative and welcoming.
So the question is, what next ? Recent trends in Malta suggest that the advancements in Blockchain technology will soon hit vigorously the island. Powerful checks and balances inherent in blockchain could make the transactions, including real estate ones, much faster and more transparent. Having all information such as documents and financials in one digital record, that can be duplicated time after time, with any changes to the documentation being visible, will increase transparency. This could encourages, companies to have better credit which will in turn make increase their value. Costs would be lowered as not as many third parties would need to be involved and researches and due-diligence would be made easier, thus creating larger trust between the involved parties. In turn commercial, deals would even be able to be completed at a much faster pace, which is better for all involved. Blockchain and smart contracts have the potential to make CRE transactions faster, more reliable and more secure. It seems almost certain for Malta to follow suit and head in the same direction with the rest of the world economic leaders. It's only a matter of time!