Hong Kong could see more instances of ‘tokenisation’ in real estate, as market embraces fintech, says law firm DLA Piper

Name: China calls for more research and investment into blockchain technology
Uploaded: 2021-03-01T23:30:14.000Z
Duration: 1 min 38 s
Description: China calls for more research and investment into blockchain technology

Law firm DLA Piper is working with clients on a plan to ‘fractionalise’ real estate investment for wide pool of investors

Shop king Tang Shing-bor’s Stan Group unveiled a private buy-a-brick plan in 2019 in one of the first tokenisation plans in the city

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Tokenisation can make illiquid fixed assets such as real estate more tradeable and accessible to small investors. Photo: Dickson Lee

Cheryl Heng

Published: 7:30am, 2 Mar 2021Updated: 7:30am, 2 Mar 2021

Hong Kong could see more instances of “tokenisation” in real estate transactions as the market embraces financial technology to make illiquid and expensive assets more accessible to a wider pool of investors.

Clients in the property development sector are looking at tokenising illiquid assets such as real estate as a form of fundraising, according to Susheela Rivers, head of Asia-Pacific real estate at global law firm DLA Piper. The efforts should materialise within the year, she added.

“Hong Kong is a city that understands real estate. It has a high point of entry,” Rivers said. Digital tokens can “create a marketplace that makes this a little bit more tradeable, an exciting new way of holding real estate”.

Hong Kong, the world’s third-largest capital market, has been a hotbed for fintech innovation, including the issuance of eight virtual banking licences since 2019 to compete with traditional lenders. Closely held Stan Group, the family office of Hong Kong “shop king” Tan Shing-bor, unveiled its “buy-a-brick” tokenisation plan in an employee incentive scheme in 2019.

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China calls for more research and investment into blockchain technology

For example, the ownership of a HK$100 million (US$12.9 million) commercial building can be fractionalised at 100,000 tokens worth HK$1,000 each, thus lowering the barrier to entry for small investors in the industry.

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