The trend worldwide appears to be moving towards selling property in smaller fractions or shares instead of in its entirety and using tokens in the transactions via a tech platform.
Text by Jan Yong
How would you like to own a stake in a luxury island in the Great Barrier Reef off the coast of Australia, or an Aspen ski resort managed by St Regis, or a 12-storey Manhattan building, or a luxury student residence or a hotel booking platform? These are all available for sale to any accredited investors around the world. You can either buy a single share or as many shares as you can afford using the US dollar, or tokens such as Bitcoin, Ethereum or a coin unique to the initial coin offering (ICO) itself.
In the case of the Great Barrier Reef namely Great Keppel Island, there are plans to create a futuristic luxury resort complete with a Greg Norman-designed golf course, 750 villas, 300 luxury apartments, and a 5-star beachfront hotel which are projected to be worth billions upon completion. Unlike many ICO proposals, the tokens on sale will be backed by the developments on the island itself.
The tokens including the Great Keppel Island (GKI) tokens can be traded on the existing digital asset exchanges thus ensuring its liquidity while the progress of the development will ensure its appreciation in value, says its proponents.
The GKI token sale is not the only example of real- estate developers fractionalising their development and seeking funding through the use of digital tokens or simply referred to as ‘tokenisation’. Since October 2018, Aspen Digital, the owner of the St. Regis resort has been offering shares in St. Regis Aspen which are represented by Aspen Coins. Each Aspen Coin will represent an equity stake in Aspen Digital. Facilitating the token sale is the well- established crowdfunding platform, Indiegogo.
The St. Regis Aspen hotel is seeking USD12 million in investment for redevelopment of a luxury ski resort in Aspen, Colorado. It has earlier ditched a Real Estate Investment Trust (REIT) Plan as its funding source.