SINGAPORE (THE BUSINESS TIMES) – Digital securities platform iSTOX has, for the first time, tokenized a private real estate investment trust (Reit) of real estate giant Mapletree Investments, reducing the ticket to invest in the fund for 50 investors accredited.
The latest tokenization concerns Mapletree’s latest European office fund, the Mapletree Europe Income Trust (Merit).
iSTOX declined to disclose the size of its minimum investment ticket and the size of a portion of the fund it has tokenized, but said in a statement Wednesday April 7 that “a portion of the fund has been made available in tokenized form and in smaller units “.
Tokenization refers to the use of blockchain technology to create fractional digital shares of “core” assets, such as real estate and art. These tokens can then be traded on a secondary market.
Merit consists of seven Class A offices in regional cities such as Manchester, Bristol, Dublin and Warsaw, with a total net leasable area of approximately 270,000 m² for a total asset value of € 1.2 billion ( S $ 1.9 million).
The trust has a target internal rate of return of 12%, which Mapletree hopes to achieve through return and growth. Mapletree announced last week that it had raised € 507 million upon closing of the fund, with the participation of new and regular investors including pension funds, insurance companies, investment firms, asset managers. active and private banking clients.
The main subscription for iSTOX tokens closed last month, with 50 individual investors closing the deal. The subscribed units are now listed on the iSTOX stock exchange for secondary trading.
Small accredited investors often find it difficult to access private real estate funds due to the minimum investment amount, Choo Oi Yee, chief commercial officer of iSTOX, told the Business Times.
iSTOX enables this access by tokenizing these assets using blockchain technology and smart contracts to overcome manual processes in a security lifecycle.
Ms. Choo said, “At iSTOX, we expect digital titles to eventually become a regular part of the conversation for any business planning a show. Because they are fundamentally more efficient, we expect digital securities to grow rapidly as a proportion of total securities issued – benefiting both issuers and investors.
Asked about the risk office property investors could be exposed to as remote working becomes more standardized around the world, Ms. Choo noted that the Merit portfolio has a high occupancy rate.
“In addition, the weighted average maturity of the portfolio leases is 6.8 years, which is longer than the fund’s five-year life. These factors reduce the risk for the fund’s investors,” a- she declared.
In March, iSTOX announced its tokenization of Astrea VI, a series of privately backed bonds. Through iSTOX, accredited platforms can invest in the US dollar denominated tranches of Astrea VI – Class A-2 and Class B bonds – for a minimum of $ 20,000.
The minimum investment tickets in a traditional placement exercise early last month were US $ 50,000 for Class A-2 bonds and US $ 200,000 for Class B bonds.