A newly launched Singapore-based platform aims to bring real-estate assets typically within the exclusive purview of big institutional investors to retail investors for as little as £100 (US$122) through digital tokens.
Shareable Asset, as the app is known, has so far attracted between 200 and 300 potential investors based in Singapore, other parts of Southeast Asia and South Korea. They can co-invest in two studio units at a students’ accommodation in Sunderland, England, according to Wong Kook Fei, the company’s chief executive.
The company launched its website on May 19, and its app on May 22, and aims to tokenise assets worth between US$50 million and US$100 million this year. “Our aim is to basically bring great institutional real-estate assets to retail investors, that’s why it’s fractional,” Wong said. He said the Singapore government through GIC was also a big investor in student housing assets worldwide. Shareable is not related with the sovereign fund.
GIC has since 2016 invested US$4.5 billion in student accommodation in countries ranging from Australia to Germany, making it one of the world's top investors in the segment, according to a 2019 report by Savills. The fund manager oversees about US$440 billion of Singapore’s financial reserves.
To invest through Shareable Asset, one has to download the app on a mobile phone, complete a vetting process, connect their bank account and choose their preferred investment. The initial investment could be as low as US$100. The platform also uses blockchain technology to ensure the security and transparency of transactions.
The company will profit off its partnership with developers, real-estate funds and asset managers that will use the Shareable platform to sell their properties. The company will get a 5 per cent fee from asset owners instead of the retail investors.
“We provide security investment platforms and we are one of the first regulated companies that can sell and issue security tokens to global investors,” said Will Lee, chairman and co-founder of the venture.
The company is also aiming to offer its potential investors access to a portfolio of Australian hotels, estimated to be worth US$200 million.
Student housing and hotels have both been particularly vulnerable in the current global economic climate, with the coronavirus pandemic forcing colleges and universities to hold classes online, and bringing travel across the globe to almost a standstill. Foreign students, who typically need student accommodation, are staying in their home countries, while hotels are barely surviving the tourism collapse.
Wong, however, said Shareable Asset had secured a three-year rent guarantee from the student housing developer in Sunderland, while the Australian hotel portfolio was “high-profile” and a “good deal”.
Investors may exit their investment in two ways. One is by a majority vote to sell the asset, and the other through an exchange that the company will set up, so investors can buy or sell tokens as in a stock market.
Shareable Asset is not the first to think of offering tokenised real estate to investors. Hong Kong-based Stan Group Holding, the family-owned company that represents the assets of shop king Tang Shing-bor, is also seeking to offer tokenised property. It has a real-estate portfolio estimated to be worth more than HK$50 billion (US$6.45 billion). Its plan has not yet been approved by the Hong Kong authorities.
In October, Stan Group launched “Buy-a-Brick”, a programme that allows its employees to buy digital tokens, which represent a property and are stored using blockchain. If a profit is made on the sale of a property, the ‘brick’ holders get a share.
While tokens for real estate have been gaining traction, as they allow for greater liquidity and faster and cheaper trading, risks remain.
In Hong Kong, laws and more education about investment schemes are needed to safeguard investors’ interest, said Louis Tse Ming-kwong, managing director of VC Asset Management. “Laws are needed to make sure that investors don’t fall for a scam,” he said.
“Token trading is still in its infancy, and there is a severe lack of regulatory policies for token evaluation and issuance,” said Maggie Hu, an associate professor of real estate and finance at the Chinese University of Hong Kong. “Inherently, the decentralisation of blockchain technology is contradictory to centralised regulation. In the absence of well-maintained regulation, investors may be subject to a high risk of falling victim to a Ponzi scheme, often associated with the high volatility of token valuations and disguised by the innovations in technology.”
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