Today, German asset tokenization firm Fundament Group said real estate developer Bauwens acquired an undisclosed amount of shares of the company. The partnership will give Fundament access to Bauwens €6.7 billion worth of real estate projects in Germany.
Fundament is using blockchain to decentralize property ownership and open up the market to a broader range of investors. In July, the company received approval from the German Financial Market Supervisory Authority (BaFin) for a €250 million tokenized real estate bond.
The firm is selling the tokenized real estate securities backed by a portfolio of properties. The idea is to trade real estate-backed securities without any intermediaries such as investment firms, brokers, or transfer agents.
For institutional investors, Fundament physically hands out a hardware storage device with the security token stored on it. Retail investors can visit the company’s website to buy a real estate token which can be transferred to their digital wallet. In both cases, investors can either pay in cryptocurrencies or fiat money.
For Bauwens, it opens up a new means to finance its planned and under-construction properties. Alexander Jacobi, Managing Director of Bauwens digital GmbH said, “The Fundament Real Estate Token is an extremely interesting option for selling our real estate and we are proud to support them with our real estate and digitization expertise.”
Fundament’s token runs on a public Ethereum blockchain using the ERC-20 standard. Before Bauwens entry, the token was backed by five separate construction projects, three in Hamburg, one in Frankfurt and one in the university town of Jena.
Real estate tokenization is slowly gaining momentum. In Korea, SK Securities is working with blockchain firm Kasa Korea for digital asset-backed securities.
Last month, alternative investments platform Harbor tokenized $100 million worth of real estate funds on Ethereum for iCap Equity.