According to the Hong Kong Economic Times, Tykhe Capital Group has today launched Hong Kong's first real estate fund security token offering (STO).
The tokens are issued by its subsidiary, Pioneer Asset Management, and are targeted at professional investors. The goal is to raise approximately HKD 100 million in funds, which will be used to acquire the ownership rights of five interconnected commercial properties located on Prince Edward Road West in Kowloon. If regulatory approval is obtained, the tokens may be listed on the company's virtual asset trading platform, HKbitEX, in the future.
The token is named "PRINCE Token," Vice President of Tykhe Capital Group's Capital Markets and Wealth Management, stated that STOs can reduce financing costs for property owners and developers.
With high-interest rates, bank mortgage loans can have rates as high as 5%, but financing through tokenization of funds can save at least one-third of the costs. Compared to traditional channels such as initial public offerings (IPOs) and real estate investment trust (REIT) listings, which involve investment banks, lawyers, accountants, and can have preparation periods lasting up to 9 months, financing through fund tokenization allows fund managers to coordinate all aspects, shortening the timeline to as little as 3 months.
For investors, real estate investments have traditionally required a significant amount of capital, with a typical minimum investment in a private real estate fund being around USD 1 million (approximately HKD 7.8 million). Fund tokenization lowers the entry barrier, with an entry fee for this project set at only HKD 1,000. Once the tokens are listed on a virtual asset trading platform, they can be traded on the secondary market 24 hours a day, and ownership rights are transparently recorded on the Ethereum or other blockchain.
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