Mitsui & Co Digital Asset Management announced plans to issue regulated digital asset securities linked to real estate. Initially, it will launch the ‘Alterna’ platform targeted at professional investors in the Autumn. However, it also intends to enable retail offerings in due course.
In Japan, most conventional products offering exposure to real estate are sold in a face-to-face manner. Hence securitizing unlisted real estate as a digital asset is part of a digital transformation initiative. Mitsui wants to transform various parts of the fund management process, particularly for real estate, including fund creation, management and sales.
Initially, the Alterna solution will launch as a beta version limited to 20-30 participants. Today it announced it had completed registration as a ‘financial instruments’ business.
Turning to retail investors, Mitsui is planning a digital securities fund that will also focus on real estate. In Japan, a large proportion of private assets are held in cash or deposits. It’s estimated that the amounts invested with asset managers are less than half the levels in the West.
So far, Mitsui has a project pipeline of Yen 19 billion ($170 million) for assets to be tokenized, with plans to reach Yen 100 billion ($910 million) within three years.
Mitsui is working with Japanese blockchain startup LayerX with whom it started working early last year.
Fifty-three percent of Mitsui & Co Digital Asset Management is owned by Mitsui, and LayerX has a 36% stake. SMBC Nikko Securities, Sumitomo Mitsui Trust Bank and JA Mitsui Leasing hold the balance of the stock.
Meanwhile, Sumitomo Mitsui Trust issued a security token earlier this year on the Securitize platform.
Another Japanese firm planning real estate asset-backed securities is MUFG Trust, using its Progmat security token platform. SBI Securities and Nomura Securities will underwrite and sell the security tokens. SBI and Nomura also have a security token joint venture BOOSTRY which is initially targeting tokenized bond securities.
