According to Coindesk, a startup called Fundament, has been given the green light in Germany to issue the first tokenized real-estate backed bond that can be widely offered to individual investors.
Germany’s financial regulator BaFIN gave its approval this week to the Berlin-based firm for the 250 million euro ($280 million) offering. Because it is regulated, the token will be open to any retail investor anywhere with no minimum investment restriction. As Coindesk remarks, “In other words, someone in, say, Indonesia will be able to buy 100 euros worth of ethereum tokens and thereby indirectly invest in German commercial property.”
BaFIN told Coindesk: “We can confirm that we granted approval for a Fundament Group prospectus. It has indeed been the first time we have approved a prospectus regarding blockchain-based real estate bonds, but not the first time in respect to blockchain technology as such.”
Fundament will start marketing the token next month, which will run on the public ethereum blockchain using the ERC-20 standard.
Blockchain real estate is a fast growing space. Florian Glatz, co-founder of Fundament Group, said typically what has been seen in the past are private placements that have not required a prospectus or a financial market authority’s approval. One example of this occurred back in Marche, when Inveniam Capital Partners tokenized some $260 million in four private real estate and debt transactions, starting with a WeWork-occupied building in downtown Miami, Florida. And there are other examples.
But Fundament is doing something radically different. Glatz told Coindesk: “The reason we went through this long tedious process with regulators was to get rid of any restrictions. Normally these projects are limited either by the minimum investment amount, which would be north of €100,000 or limited heavily in the amount of investors you could have. So it’s the first really like mass-market tokenized real estate for the world.”
He added, “Holding a token enshrines a legal claim of the holder against the issuer of the bond to pay them an annual dividend of around 4–8 percent, and obviously once the run time of the fund is over and there is an exit, then the token holders get the complete value that was within this fund.”
If you want to own real estate in Germany, look out for the launch of the Fundament token next month.