In-Depth look at how Tokenization can be an investment tool in Real Estate
The tokenization of real-world assets—especially real estate—is one of the most transformative opportunities in Kenya’s investment landscape. Tokenization refers to the use of blockchain technology to digitally represent ownership or interest in a tangible asset. In the context of real estate, it allows investors to purchase fractional digital tokens that represent a share of income or value derived from property holdings, without needing to acquire physical or registered ownership.
"I actually believe this technology is going to be very important…I believe the next generation for markets, the next generation for securities, will be tokenization of securities" - Jonathan Steinberg
Current Landscape
In Kenya, this innovation is rapidly gaining ground. Tokenized real estate structures are typically established using a trust or a holding company which retains legal title to the land or property. Investors who acquire tokens become beneficiaries of this trust, enjoying rights to income distribution, capital gains, and even decision-making (where applicable), all while staying compliant with Kenyan land ownership laws.
Why Tokenized Property Is Gaining Attention in 2025
The growing demand for accessible, affordable, and secure real estate investment options has made tokenization particularly attractive in 2025. Kenya’s vibrant property market, combined with strong mobile and blockchain adoption, makes it an ideal environment for digital real estate solutions. For both local and foreign investors, tokenization offers a smart entry point into premium property portfolios without the challenges of managing physical assets.
Beneficial Interest
However, it’s important to note that under current Kenyan law, these tokens do not confer direct title under the Land Registration Act (Cap 300). Instead, they grant a beneficial interest through a regulated investment structure. This model aligns with Article 65 of the Constitution, which restricts foreign ownership of freehold land. In tokenized arrangements, foreign investors can still participate—legally and meaningfully—by holding interests through Kenyan-registered trusts or entities. This ensures legal clarity and compliance while enabling global capital to flow into Kenya’s real estate sector.
Where Tokenized Real Estate Investments Are Headed in Kenya
Tokenized real estate is already being explored in urban developments across Nairobi, satellite towns like Athi River and Syokimau, and hospitality sectors in coastal Kenya. These projects are designed to offer consistent income returns and asset-backed security using smart contracts and blockchain transparency.
Regulator Position
The Capital Markets Authority (CMA) is closely monitoring these models to ensure they fit within Kenya’s investment and digital asset regulatory frameworks. While the legal landscape is still evolving, the direction is clear: Kenya is open to innovation—so long as it protects investor interests, upholds land laws, and ensures transparency.
Classification
The regulatory classification of these tokens is also important. They are not treated as traditional securities or land titles, but rather as interests within a collective investment scheme, subject to appropriate oversight. This is an important consideration for both structurers and buyers.
Get In Touch
Want to explore how tokenization can transform your real estate investment or funding strategy or for legal advisory on structuring compliant, secure, and future-ready digital asset offerings in Kenya? Talk to us. Email: eddah@ekcadvocates.com
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