The Business Of Buildings

Ownership is changing.

Two weeks ago, I explored how employees became owners. Following that, I looked at how the crowd became the capital. This week, I want to examine the final step that is now appearing in that journey. Not who owns businesses. Not who funds them. But who gets to own the assets that create so much of the world's wealth. 

Property occupies a unique place in society. It underpins family wealth, institutional investment and national economies alike. Yet unlike businesses or shares, property has remained remarkably difficult to divide. It is steeped in historical and legal red tape, and unpeeling that is a challenge. If you wanted to own a building, commercial or residential, or even a development site, you still needed substantial capital or access to those who had it.

Today, that too is beginning to change. 

This is not another article about creative property strategies. It is about something much more fundamental: the changing nature of ownership itself.  

The Idea

If the first ownership revolution asked whether employees should own businesses, and the second asked whether ordinary people should help fund them, this final question is perhaps the most ambitious of all.

Why should ownership of one of the world's largest asset classes remain limited to those with the deepest pockets? 

For generations, property has been one of the most effective ways to create and preserve wealth. Yet participation has often depended upon already possessing wealth. Those who owned property found it easier to acquire more, whilst those who did not frequently struggled to acquire their first meaningful stake.

In many ways, that imbalance has grown. Property prices have steadily stretched away from wages, whilst institutional ownership has increased across much of the rental sector through Build-to-Rent and other large-scale investment vehicles. For many individuals, one of society's greatest stores of wealth has become increasingly difficult to access. 

Fractional ownership challenges that assumption. It asks a simple question: should participation in property be reserved only for those able to buy an entire asset?

Why should somebody need £500,000 to participate in a £500,000 asset?

Why not £5,000?

Or £500?

This is often presented as a blockchain story but I think it is something much more human.

It is an ownership story. 

The Mechanism

Over the past thirty years I have watched property finance evolve through several distinct phases. My own development company explored crowdfunding extensively, and many of the structural questions we were asking then are remarkably similar to those now being asked about tokenisation. In fact we explored tokenisation too. At the time it felt rather like searching for the Holy Grail; technically fascinating, but commercially and legally just beyond the horizon. I, for one, did not have the patience. 

The industry has been moving steadily in one direction for decades. Property syndicates became funds. Funds became REITs. Crowdfunding widened participation. Realistically, tokenisation represents the next chapter in what has for a long time been that same old story again. 

Seen through that lens, blockchain is not the revolution.

Fractional ownership is. 

The technology matters because it reduces friction. Smart contracts can simplify administration, improve transparency and make ownership easier to transfer. Yet its real significance lies deeper. The real power is that it allows the minimum unit of ownership to become progressively smaller.

This is the trend running through this entire series. 

Employees increasingly own businesses.

Customers increasingly become investors.

And property itself is beginning to move in the same direction.

The implications extend well beyond finance. Developers may gain access to entirely new pools of capital. Smaller investors may diversify into projects that would previously have been beyond their reach. Communities may one day own meaningful interests in the places they live, rather than simply watching change happen around them.

Ownership once again changes behaviour.

Or perhaps more accurately, participation changes behaviour. 

The Practical Reality

Of course, property has an inconvenient habit of existing in the real world.

Roofs leak. Tenants default. Planning permissions expire. Buildings require maintenance, insurance and management. Technology cannot solve those problems, which is a sound reason why tokenising property is fundamentally more complex than tokenising digital assets. 

Creating a token is relatively straightforward.

Creating a legally enforceable ownership structure around a real building is not.

Property law, securities regulation, taxation, lending and governance all have to work together before the technology itself becomes particularly useful. In many respects, the legislative leap is greater than the technological one. 

A friend, Antony Abell, has been working on tokenising property since before I looked at it. It’s taken 15 years, but his company TPX Global now has the UK government signed up, with HMRC and the Land Registry in tow. A significant challenge remains though, and that is liquidity. 

Fractional ownership undoubtedly makes property easier to divide. It does not automatically make it easier to sell. Owning one thousandth of an office building is valuable only if there is an efficient market where somebody else wishes to buy it. 

Technology creates possibility.

Markets create liquidity.

The two should never be confused.

As with employee ownership and crowdfunding, reality eventually catches up with every revolution. Fractional ownership cannot rescue a poor development, compensate for weak management or transform a flawed strategy into a successful one.

Human nature remains stubbornly consistent regardless of how ownership is distributed and we are likely to see failures early on. 

Participation

Throughout history, wealth has tended to follow ownership. Not simply because assets appreciate but because ownership creates opportunity. Rental income. Capital growth. Borrowing power. Security. Choice. Status. 

The significance of fractional ownership is not that everyone will suddenly become a property investor. It is that more people may have the opportunity to participate and it should prove a safe way to diversify even small investment amounts. 

Looking back, these three articles were never really about employee ownership, crowdfunding or tokenised property. They were about a single structural shift. 

Participation.

The twentieth century concentrated ownership because technology, law and finance largely demanded it. The twenty-first century is steadily distributing ownership because technology increasingly permits it.

Employees can own businesses.

Communities can fund businesses.

Individuals are starting to own meaningful interests in buildings that were once the preserve of institutions. 

Whether this ultimately creates a fairer society remains to be seen. Technology has never guaranteed better outcomes. It merely creates new possibilities. The responsibility for using them wisely remains entirely our own. 

For founders, investors and business leaders, these are no longer philosophical questions. They are here and now. And they are strategic ones. 

Ownership is a structure. 

Capital is a structure. 

Markets are structures. 

And as I have argued throughout this series, structure shapes behaviour. 

As ownership changes, so too will the behaviour of our businesses, our markets and, perhaps, our society.

Easter Eggs this week

“journey” – Journey in Satchidananda, by Alice Coltrain and Pharoah Sanders 

“revolution” – Revolution, by The Beatles

“that same old story again” – Same Old Story, by Stevie Wonder

“Human nature” – Human Nature, by Michael Jackson