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Germany-based Black Manta Capital is set to tokenize Berlin-situated real estate worth more than $12 million. Collaboration between Black Manta Capital and real estate firm Tigris Immobilien made it possible for everyday investors to purchase the project’s tokens with a minimum €500 investment. How likely it is for such an offering to inspire ordinary investors to participate?
As of 14th April 2020, Black Manta Capital is tokenizing a real estate development which is generally reserved for big-time investors. The aforementioned real estate development is now available to ordinary investors through a security token offering — which is known to facilitate smaller investments in a feasible and affordable manner.
Black Manta Capital has partnered with Germany-based real estate firm Tigris Immobilien with an aim to introduce security token offerings to the German and Austrian real estate marketplace. Token holders will share 20% of the sale profits through securitized participation.
Construction of the Berlin real estate is planned to be finished by 2022. The real estate will incorporate 2000 square meters in total, chiefly comprising suites up to 60 square meters in size. The real estate units are planned to be traded to investors and owner-occupiers which means that the small-time investors may expect a decent profit from their investment.
The STO is regulated by BaFin, Germany’s financial regulator and the European nation’s Federal Financial Supervisory Authority. It’s necessary to point out that because of the specific capital market requirements and regulations, this exact offering will be available only for Austrian and German investors.
However, this is not the first case of real estate tokenization in Europe. Namely, French digital investment bank Equisafe previously tokenized a €6.5 million property in France. Therefore, it appears as though tokenization as a means of acquiring capital for real estate development is gaining visibility and popularity in the European marketplace.
BaFin has already given a green light for several STOs, with Black Manta Capital being among the first to launch an STO in Germany. The German authorities’ positive attitude towards STOs isn’t surprising as this type of service is expected to introduce cost-effective benefits to traditional financial securities.
Lower transaction costs, transferability, and a myriad of other advantages are the main reasons why STOs are likely to become a superior investment device. Christian Platzer, the CEO of Black Manta Capital lauded the array of options that STOs provide for small-time investors. According to Platzer’s interview with Cointelegraph, faster and cheaper transactions will benefit both investors and real-estate businesses.
Black Manta’s management expects more STOs to organize funding rounds through its platform. The company aims to pursue the STO implementation and, therefore, gladly supports offerings from both small and medium-sized enterprises, and numerous funds.
Considering the compelling advantages of STOs, it appears that the moment when tokenization becomes a standard practice is nearing. In the cases of Germany and France, companies that provide STO services are getting support from the state authorities, thus, getting a chance to introduce the benefits of tokenization to the entire European marketplace.
Will the tokenization of real estate inspire the use of STOs in other trading sectors? How can ordinary investors better real estate investment? Please let us know your thoughts in the comments below.
Image courtesy of Road Affair.