UK: Hong Kong developer Knight Dragon is attempting to raise up to £140 million by selling tokens secured against a BTR block at its Greenwich Peninsula scheme in south-east London.
The company is undertaking a tokenisation that would give investors the right to the profits from Building Four at the 13-000 unit scheme. It said it was the first tokenisation of a building to be undertaken in central London.
Via its subsidiary KD Tokens, the company has minted the tokens, called KDB4 Tokens. Holders of the tokens will share 80 per cent of the gross profit generated from the building.
Building Four is a 191-unit block that is fully leased. Knight Dragon says the building is valued at £140 million. It will put on sale 100,000 tokens, called KDB4, initially valued at £1,400 each.
Sammy Lee, founder and vice chairman of Knight Dragon, said: “At a corporate level, Knight Dragon has just revolutionised the entire European property market and will now move to do so internationally. At an individual level, for a relatively modest investment, individuals can own a piece of Central London real estate profit. In the same way an asset can be securitised by dividing it into shares, tokenisation allows an asset to be divided into individual tokens. The tokens represent a specific share of an underlying asset.”
“In this case, ownership of KDB4 Tokens will represent a fractionalised interest in a contractual right to share in the gross profit of Building 4. Building tokenisation is set to revolutionise the global property industry and we are pleased to be a leader in this revolution. Pioneering in property is central to Knight Dragon’s DNA. We are entrepreneurial, creative-spirited makers of places who bring new ideas and set new standards for urban living. Being the first company to tokenise an entire building in Central London fits exactly with our bold vision for the global property industry,” he added.
Robert Lui, Hong Kong digital asset leader at Deloitte, said: “Real estate tokenisation could become a new key to unlock value from property which is one of the largest assets in today’s private market. It has the potential to become a primary new funding mechanism in addition to existing current capital market solutions.”
Richard Margree, CEO of Knight Dragon in London, added: “We are constantly looking for new ways to innovate, always challenging the status quo and staying true to Knight Dragon’s entrepreneurial and creative spirit. The world is seeing a blockchain revolution and is preparing for the immense changes and benefits which will be driven by Web3. Knight Dragon will be one of just a few global real-estate developers bringing a new source of value to investors by offering fractionalised economic rights, in this case via fractionalised profit share, through tokenisation. Tokenisation also potentially solves real estate’s largest problem: asset liquidity. Traditionally, multiple parties are involved in legal transfer of property. Tokenisation eliminates the requirement for any third-party involvement, allowing ownership to be transferred directly from investor to investor.”
