Two real estate properties located in London are now being tokenized.
Global law firm Baker McKenzie announced on Tuesday that it has advised Knight Dragon Investments Limited (“Knight Dragon”) and its subsidiary KD Tokens Limited on the tokenization of economic interests in the 191-unit Building 4, Upper Riverside Development – a 191-unit luxury residential development that is located in London, United Kingdom.
Baker McKenzie offered legal and financial structure and other advisory services, which enabled Knight Dragon to tokenize its 29-story high-rise luxury residential development, which is at the heart of the corporation’s ten million-square-foot iconic Greenwich Peninsula development.
The 191-unit luxury residential property is the UK’s latest real estate-backed security token offering (STO) and the first project of Knight Dragon Investments’ real estate tokenization plan to tokenize approximately $500 million of its real estate projects across the UK in the near future.
Knight Dragon, a London-based property developer owned by Hong Kong’s property tycoon Henry Cheng, tokenized at least $140 million of the value of the 191-unit luxury residential property. The No.4 Upper Riverside STO (KDB4 Tokens) was created and digitized using Blockchain technology and Baker McKenzie’s advisory services and issued on the technology. Investors (holders of KDB4 Tokens) will share 80% of the gross profit generated from the prime Central London real-estate development. Part of the profits made from Greenwich Peninsula Building 4 will be distributed to each holder of KDB4 Tokens.
Knight Dragon’s token structure is backed by the property’s audited, actual cash flows. With blockchain, investors benefit from the token’s simplicity and transparency, which represents profits from a prime Central London real estate development. Holders of the tokens are also set to automatically be entitled to future Knight Dragon developments in Greenwich Peninsula, having the first right to invest in or buy future offerings from Knight Dragon.
Joy Lam, a virtual asset specialist, who led the Baker McKenzie team in advising Knight Dragon, said the Knight Dragon building tokenization is a ground-breaking transaction that transforms a traditionally illiquid asset into an efficient and transparent investment product that is accessible to a broad base of investors.
“We are pleased to be advising on the structure and offer of these blockchain-native digital tokens that represent a fractionalized interest in the economics of prime real estate in Central London. This innovative transaction clearly demonstrates how blockchain technology can be harnessed by future-oriented asset owners.”
Knight Dragon Developments is a property developer, interior designer, real estate investor, and property services manager. The real estate development firm is incorporated in Hong Kong with an experienced development team and is an investment vehicle owned by Dr. Henry Cheng.
The urban regeneration of Greenwich Peninsula is becoming big enough to hold its own against the massive 51-storey skyscrapers of Canary Wharf.
A former industrial site, Greenwich Peninsula is poised to become home to 40,000 people over the next 10 years. It is emerging as a destination to visit, and a place to work and grow a business – particularly for those in the creative industries.
Some 5,000 residents have already moved into the two out of seven neighbourhoods already completed (Upper Riverside and Lower Riverside).
Dr Henry Cheng Kar-Shun, the son of the founder of Chow Tai Fook Jewellery Group, is chairman of Knight Dragon. Dr Cheng worked with Knight Dragon founder and vice-chairman Sammy Lee and CEO Richard Margree to acquire Greenwich Peninsula back in 2012.
Blockchain Boosting Real Estate Business
The latest development by Knight Dragon is a testimony that blockchain-based real estate is gaining increasing popularity as a way for investors, buyers, and sellers to interact with each other and learn about properties.
Blockchain is making a tremendous impact on the real estate industry. By leveraging Distributed Ledger Technology (DLT), trust increases through greater transparency in the sector. Trust in real estate websites, agents, and listings are imperative in the industry. Blockchain expedites contract processes, saves time, and reduces costs.
The technology makes it possible for users to tokenize houses, properties, and apartments and represent them on the blockchain.
Image source: Shutterstock