TZero to tokenise $640 million of real estate projects across the UK
tZERO, the global leader in blockchain innovation for capital markets, announced today that it has partnered with Alliance Investments, a UK-based direct-to-developer real estate investment company, to provide technology services to tokenize Alliance Investments’ River Plaza, a 180-unit luxury residential development that is located in Manchester, UK.
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River Plaza is the UK’s first real estate-backed security token offering (STO) and the first project of Alliance Investments’ real estate tokenization plan to tokenize approximately $640 million of real estate projects across the UK over the next several years.
Alliance Investments intends to tokenize at least $25 million of the value of River Plaza. The River Plaza STO will be digitized using tZERO’s tokenization technology and Megalodon’s advisory services and issued on the Tezos Blockchain. River Plaza’s security tokens will provide investors with liquidity through tZERO’s secondary trading technology, which powers the alternative trading system operated by PRO Securities, LLC, a subsidiary of tZERO. The STO is expected to launch in Q1 of 2020.
tZERO CEO Saum Noursalehi stated, “We believe that asset tokenization will revolutionize the real estate sector. We applaud Alliance Investments for spearheading one of the world’s first real estate-backed security token offerings. Tokenization of real estate will democratize access and greatly enhance liquidity for this asset class.”
According to a 2016 Savills World Research Report, real estate is the largest asset class in the world, valued at $217 trillion, which represents about 60% of all the world’s assets. While this market is greater than the value of all stocks, shares and stocks combined, it is one of the most difficult asset classes to invest in. Only one third ($81 trillion) of the global real estate asset are readily investible at scale, with the rest not being accessible to public investors in a meaningful way.
A real estate-based STO is the process of issuing digital equity securities in a holding company that owns the real estate asset. More generally, security tokens can be structured to represent a variety of ownership and economic interests in an underlying asset, such as equity in a company that owns the asset, an interest in debt secured by the real estate, a stream of income based on cash flows from the asset or an interest in the capital growth of an off-plan project, to name a few.
Alliance Investments CIO Rani Zahr said, “We view tZERO as a leader in blockchain innovation and asset tokenization solutions and are excited to partner with them on our first STO. We strive to stay ahead of the innovation curve and believe that security token offerings are the future. They are more efficient, cost-effective, autonomous and democratic in comparison to traditional financing. We hope to continue to collaborate with tZERO to see out our real estate tokenization plan.”
Alliance Investments’ real estate tokenization plan to tokenize approximately $640 million of real estate projects will occur over the next several years in all parts of the UK with projects ranging from residential and student accommodation to commercial and hospitality properties. The River Plaza building is scheduled to complete in Q3 of 2022.