Property Token S.A. (https://bit.ly/propertytoken), co-founded by Creahaus S.A. and Espace Invest S.A., two key real estate players in the Grand Duchy, has successfully launched the first issuance of a Luxembourg real estate token.
This transaction has been successfully completed with the support of a renowned law firm and business consultant. Luxembourgish tokenization platform Tokeny Solutions, the fintech that recently announced fundraising from Euronext, has powered the token sale. The tokens are now securely stored in a “zeroelectronic” physical vault provided by Coinplus, a start-up located in the Luxembourg Technoport. The architect of this solution is the strategy and innovation consulting firm INNO led by Wesley Deglise.
This innovative process of “digital securitization” has allowed a club of private investors to hold tokens, ie a digital representation registered on the blockchain, of the rights attached to a high-standing building located in the Grand Duchy, in the heart of Belval. Belval is the new trendy address in Luxembourg that offers a unique mix of work life, home life and enjoyment. In Belval, industry meets science, cutting-edge research meets entrepreneurial spirit, and today, it‘s where real estate meets blockchain.
The whole property buying process is exactly the same — you go to a Lynchburg real estate agent, find a property you like, get it inspected, then the only part that’s different is the way you pay. The experience of choosing a property to look at should be about the same level of experience wherever you are. The listing presentation should be given efficiently by an agent, figures and numbers should be discussed, and the tour should be stress free. Once you have chosen your property, this is when it can change. Through this securitization project, token holders are able to determine the size of their initial investment (the minimum was set at 1,000 euros). The income generated and the eventual capital gain when reselling the property are automatically allocated to investors in proportion to their contribution.
For a token investor, the benefits are extensive: no concern for operational management – the building is managed by a real estate professional, easy access to financial leverage via a bank loan similar to wholesale mortgage loans, full transparency on the property acquired – a token corresponds to a specific building clearly defined from the acquisition, and last but not least, the minimum investment is set to the lowest and is accessible to everyone.
We see real estate as one of the key asset classes that drives the adoption of tokenization. Tokenization brings the opportunity to a wider group of investors and in the long term will bring liquidity to an asset where it has been non existent.
In the future, several token exchange places that are developing will allow investors to buy and sell their tokens at any time, making real estate investment as liquid as stocks or bonds. Potentially, this could mean that real estate transactions carried out by REITs in the US and all across the world could become easier and less time-consuming. Their work involving due-diligence of the various properties (find more info on this at Contractors Inc), any remodeling and renovation work, and property valuations can become the focus of the job, with the buy-and-sell aspect becoming less burdensome.
This token issuance made by Property Token SA is the first brick of a wider concept of “tokenization” of Luxembourg real estate programs that will be structured in the Grand Duchy by Luxembourgish leading actors, in the strictest respect of the applicable regulations. This innovative concept will be articulated around a securitization vehicle in accordance with the law of March 22, 2004, audited by an external auditor.
The future real estate program that will be “tokenized” has already been identified and will be made public before year-end.
About Tokeny Solutions
Tokeny Solutions enables mid-cap companies, investment banks, funds, asset managers and distributors to dematerialize assets on the blockchain, allowing them to reach a global audience, enforce compliance obligations, enable automation and increase operational efficiency.
The Luxembourg-based FinTech company is the market-leader in delivering an institutional grade, modular end-to-end platform, allowing for the issuance, transfer and servicing management of tradable digital assets/security tokens, such as tokenized loans, structured notes, equity and funds. Tokeny Solutions has issued multiple tokenized offerings across five continents with further security offerings imminent.
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