Real estate in the metaworld: is it worth investing?

[AVIS D’EXPERT] Many companies are trying to buy land in the Meta Universe. Opportunity for retail investors? Transcript by our expert Bassel Abedi, founder of Horiz.io (ex-Rendementlocatif.com).

Immersive 3D virtual worlds, the metaverse, or “metaverse” in English, is starting to make a lot of noise. Thus, this new technological tool is of interest to the largest investors, particularly in the real estate sector.

But should we really invest in the metaworld? Does this digital revolution represent the future of future generations? We will explain everything to you.

All about the metaverse

Metaverse, what is it?

The metauniverses have actually existed for several years. The metauniverse provides access to a parallel virtual world and evolves there with a personalized avatar. In this way, you can move inside, interact with other avatars and live there as in the real world. To make the experience as close to reality as possible and as exciting as possible, there are now digital virtual reality helmets, special costumes or even gloves to feel the touch.

If this means something to you, that’s fine! Some directors or authors have already explored the concept of the metaverse.

A little history

It all started in 1992. Neil Stevenson coined the term meta universe to describe a parallel world accessible through a helmet in his science fiction novel Virtual Samurai. The plot unfolds in a futuristic universe called cyberpunk.

In 1999, Lana Wachowski and Lilly Wachowski took on the role of writing the script for the Matrix saga and its cyberspace, explored by the protagonist Neo.

But it was Steven Spielberg in 2018 with his film “Ready Player One” developed the concept of the metaverse. He develops the metaworld OASIS, in which his main character Wade Watts becomes the hero of the parallel digital world thanks to the digital headset.

The largest companies enter the metaworld

The metauniverse no longer exists only in movies. Now you can get there thanks to a virtual reality headset from various games or programs that allow you to enter this virtual world, such as The Sandbox, VRChat, Rec Room, Horizon Worlds …

Thus, this digital revolution is attracting big brands that are already positioning themselves on it and investing heavily. According to Strategy Analytics, in 2020 the metacospace market was about $ 46 billion. Its market value by 2025? $ 280 billion …

The Meta group, formerly Facebook, has also invested heavily in the development of the metaworld. But this is not the only thing! Epic Games (Fortnite) has raised $ 2 billion from Sony and Lego to create a metaverse. Many big brands have also entered the metaverse: Nike, L’OrĂ©al, Disney, Gucci, Puma, Apple, McDonald’s, Carrefour or even Microsoft.

Each brand has invested in this technology, choosing one of the virtual worlds that can provide them with the most opportunities depending on their purpose: travel, work, health, real estate, education …

Real estate in the metaworld, a good investment?

In these new virtual worlds, anything is possible. Many people (individuals or professionals) buy land or real estate in metaworlds. Some even spend millions of dollars on one piece of land …

Carrefour and Adidas, for example, have already bought a lot of land in the sandbox meta universe (a real estate game where you can build, monetize and own virtual assets of the game).

Thus, the French retailer Carrefour bought a huge piece of land, which allowed him to create about 30 supermarkets. Adidas, meanwhile, bought the land for $ 1.7 million.

If we believe the strategies of these large companies, then there is real potential, and we must quickly position ourselves in the meta-universe sector. In fact, this technology, still unknown to the general public, is a precursor and is emerging. Thus, investing now in the real estate of the metaverse, it would theoretically be possible to buy land and real estate at a low price.

Of course, the owners do not live in the metaverse. However, their virtual purchase has its advantages: real estate can be rented for virtual events such as art exhibitions, concerts, mini-games or even business seminars. Later, as the metaworld evolved and became “normal” for the population, invested goods could be resold with good added value.

Note, however, it is currently impossible to calculate the return on this investment! And not for nothing… This new technology has not yet been proven, and demand may fall at any moment.

To invest in real estate, limiting the risks, it is important to calculate and know exactly the return on your investment. This criterion will allow you to determine whether your investment will be a good investment.

To estimate the final rental yield, you will need to use an online simulator or calculate it manually, taking into account the cost of purchasing the property, the income received from renting it, any financing costs, and so on.

But at the moment we do not have enough perspective on the metaworld and the real future of these virtual worlds to assess the return on investment in this type of real estate.

Basel Abedi, founder of Horiz.io