Japanese real estate firm Kenedix is no stranger to blockchain or security tokens. It announced its fifth digital security backed by a hotel in Sapporo City. The Yen 3.4 billion ($25 million) issuance uses MUFG’s Progmat blockchain platform, with MUFG as the trustee and Daiwa Securities as the lead underwriter. What’s novel about the latest issuance is in addition to the digital security, it comes with a utility token that can be exchanged for souvenirs.
In many jurisdictions, fractional interests in real estate are enabled through real estate investment trusts. In this case, the real estate asset is put in a trust, with beneficiary certificates representing the interest in the assets. It is these certificates that have been tokenized on the Progmat blockchain platform as security tokens.
The attached utility tokens can only be exchanged for souvenirs on-site at the hotel up to a value of Yen 1,930 ($14), encouraging securities owners to visit and use the hotel.
Regarding the value of the security tokens, the assets backing the security token in the ONSEN RYOKAN hotel are worth almost twice the amount of funds being raised, which will be redeemed in six years and nine months. Having made five issuances already, Kenedix aims to issue ten real estate security tokens this year, including this one. So far, the funds raised across the five properties total Yen 33 billion ($240 million). Kenedix predicts that the value of the real estate security token market will reach Yen 2.5 trillion ($18 billion) by 2030.
Meanwhile, the latest issuance brings the value of assets on the Progmat platform to Yen 43 billion ($310 million).
MUFG’s Progmat platform is based on R3’s Corda enterprise blockchain. It supports three classes of tokens, security tokens, utility tokens and Progmat Coin, which are Japanese-regulated stablecoins. Progmat Coins are not limited to MUFG and can be issued by various institutions. MUFG is conducting interoperability trials to enable stablecoins to be used to settle transactions on other blockchain platforms.
