‘Shop king’ property tycoon eyes tokenized real estate in Hong Kong

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Hong Kong commercial property development company Stan Group has signed a memorandum of understanding with a local blockchain startup to explore issuing tokens backed by their real estate assets, South China Morning Post reported.

Stan Group, a family-owned office responsible for managing the real estate assets of the “shop king,” entrepreneur Tang Shing-bor, signed an agreement with security token insurance provider Liquefy with a view “to jointly explore the business opportunities of real estate tokenization.”

Representatives from the company are to meet with Hong Kong securities regulators to discuss the proposals, which would see the firm able to sell tokenized real estate assets on the blockchain.

With meetings scheduled for 2020, there is still time for the group to work with regulators such as the Securities and Futures Commission to ensure the project gets the green light. If approved, it would be the first example of its kind where tokenized real estate assets can be lawfully sold in Hong Kong.

The proposals come at a time of squeezed demand in the local real estate market, amid fears of a downturn in both the United States and China, in part as a result of the ongoing trade war.

In a statement, group chair Stan Tang Yiu-sing said the proposals were a “bold first step towards the future” for the local real estate market.

“In taking this bold first step towards the future of the real estate sector in Hong Kong, we envision far better access and greater liquidity in the real estate market due to the fractional ownership that will be attained with tokenisation and our real estate exchange under development,” he said.

Chief executive at Liquefy, Adrian Lai, said tokenization will provide a much needed alternative for investors looking to develop a real estate portfolio.

“Together, we can change the way many in Hong Kong look at real estate investment as out of reach. There are exchanges for individual stocks and indexes but that’s not the case for real estate, where we only have Reits,” Lai said. “Even for a professional investor, it is hard to buy a portfolio of property assets. Investors can trade tokens from asset owners or from securities brokerage firm that we partner with.”