HK-based Developer to tokenize central London property

by Editor

The first tokenization of a building in central London will be attempted by the developer of a residential development in an effort to raise up to £140 million (US$167 million). The project’s developer, Hong Kong-based Knight Dragon, stated in a news release that the tokens will grant investors the right to earnings from Building Four, a 191-unit building that is fully leased.

Knight Dragon will offer 100,000 KDB4 digital tokens for sale, each with an initial value of £1,400 (US$1,670). Token owners will be entitled to 80% of the building’s revenues, or the net rental income made by the residential project. According to the developer, if rental income increases, the token value will probably increase as well, and vice versa.

Excellent news for investors interested in the emerging practice is the unveiling of another sizable real estate tokenization initiative. According to Sohail Hassan, Co-Founder and Managing Partner at MarketSpace Capital, less than 1% of the market capitalization of real estate is tradeable on a national exchange. Widespread real estate tokenization may dramatically boost market activity in a previously unliquid sector. Tokenization may become more popular as a way to invest in commercial real estate once real estate companies and investors get over significant challenges like regulatory uncertainty and lack of knowledge. However, if these initiatives encounter difficulties, it can scare off collaborators and investors from tokenized real estate

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