This week German real estate tokenization platform Tectrex announced the latest issuance of a real estate digital security by Gloram Real Estate on the Polygon public blockchain. The Central View bond was issued in accordance with Germany’s digital securities regulation eWpG with help from high profile partners.
Digital securities involve several benefits, including lowering costs and risks. Depending on the jurisdiction, it can remove the need for central clearing and it may be possible for the issuer to sell directly to investors, side stepping the need for intermediaries. Reduced costs can in turn enable the minimum investment to be lowered, which combined with public blockchains, can broaden the pool of potential investors.
One of the partners for this transaction was digital assets startup 360X which plans secondary sales in the future. Deutsche Börse and Commerzbank are backers of 360X, which will provide a secondary market for tokenized real estate, art and music. Another partner was adviser Hauck Aufhäuser Lampe Privatbank, which has advised other high profile tokenizations, including the €60 million Siemens blockchain bond earlier this year.
Like many other tokenized issuances, the “digital bearer bond” was only offered to professional investors.
Tectrex claimed that one of the “firsts” for the issuance was a shared identifier ISIN for the digital security and the traditional security accounts, enabling investors to choose different paths.
“It was just a matter of time before we would embrace the available digital solutions for financing,” said David Ziper, Managing Director at Gloram. “This scheme enables Gloram to offer its investors a holistic integrated digital life cycle including trading, reporting, and digitally executing corporate actions.”
Germany’s eWpG legislation has had a significant impact on digital securities issuances. There were five transactions in December 2021, a dozen during 2022, and 29 so far this year. In Germany a moderate proportion have been real estate tokens. That contrasts with another token friendly jurisdiction, Japan, where real estate tokens dominate.
