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Tokyo real estate projects to be funded by tokenization ahead of Olympics 2020

real estate ginza tokyo

Yesterday, Tokyo-based Lead Real Estate said it would develop condominiums and hotels ahead of the Japan Olympics 2020 by using funds raised through issuing security tokens. The company which was founded in 2003 plans to issue digital tokens for upcoming properties in Ginza, Shinjuku, Shibuya, Ebisu, Shinagawa, and Meguro using the Securitize platform

Last year, the Nikkei reported that Tokyo’s real estate market was booming due to the scheduled summer Olympics in 2020. It cited rising rents and inflow of foreign capital as the reason for the boost in real estate prices.

“The fluctuating real estate market in Japan (yields in urban areas were 3-10%) and the negative interest rate, a Japanese political measure, maximized the appeal of Japanese real estate with the 2020 Olympics games coming around the corner,” Lead Real Estate said in the announcement.

The main benefit of tokenization is that a token issuer can directly sell to an investor. This removes the middlemen, such as brokers or agents, to buy or sell properties. For property developers, it opens new means of funding without approaching banks, and other financial institutions.

In this case, San Francisco-based Securitize will provide the platform for issuing security tokens. The company recently raised $14 million from Santander InnoVentures, Mitsubishi UFJ Financial Group (MUFG) Innovation Partners, and Nomura Holdings.

Recently, Tokyo-based Monex Inc launched the Japan Security Token Offering (STO) Association along with SBI Securities, Securities, Daiwa Securities, Nomura Securities and Rakuten Securities. The Association is working to develop self-regulation around STOs to shape the digital fund-raising model in the country.

Today it was revealed that a middle eastern owner plans to tokenize a landmark London hotel.

Meanwhile, Korea’s SK Securities is working with Kasa Korea to develop a platform for tokenizing real estate.

A few weeks ago, German real estate developer Bauwens invested in Fundament Group, giving the latter access to about €6.7 billion worth of real estate projects in Germany.