How Tokenisation Tech is Making Property Development Crowdfunding a Reality
January 13, 2020
Being a property developer has long been an aspiration for many people, yet it’s an incredibly capital intensive endeavour. Most people don’t have the cash to put into individual property development projects. Instead, they opt for real estate investment trusts or property development funds. The problem with these options is that it’s ‘black box’. It’s difficult to understand precisely what you’re investing in, and often these investments come with annual fees that significantly cut into your returns.
Deep River Group understands that we need a better way for retail investors to get involved in property development.
We’ve decided to fill this gap in the market and provide ways for retail investors to start in property development with low minimum investments through asset-tokenisation technology.
What is tokenisation?
Tokenisation of assets (or, in our case, property development projects) is similar to the process of securitisation. However, the difference is that tokenisation involves issuing a digital token that represents ownership in an asset (such as real estate, art, or a company) offered in initial coin offerings (ICOs). In the case of Deep River Group, we plan to offer a coin that represents ownership in each development project upon which we embark.
Securitised tokens make illiquid assets more accessible to retail investors due to ease of trading and lower minimum investments.
Because the exchange of tokens automates many parts of the transaction, it reduces administrative burdens involved in purchasing and selling investments and assets. One instance of enhanced automation is the use of “smart contracts, ” meaning the legal agreements embedded directly into the coin, along with a fixed record of ownership. This leads to faster transaction completions and lower administration feesas well as more transparency in business interactions.
Essentially, tokenisation of assets makes large scale investments affordable for retail investors, due to lower minimum investments.
This is great news for those interested in investing in property development projects but do not have millions sitting in the bank ready to invest.
What’s next for Deep River Group?
We’re currently finalising our legal advice, ensuring our products are compliant with the relevant authorities, and looking to begin accepting investments in early-to-mid-2020.
We’re excited to launch, and if you’d like more details, be sure to fill out the form below with your name, email, and any questions or comments.
Let’s Build Something
As we prepare to tokenize development projects, we would like to keep you informed on future developments and investment opportunities. In the following weeks, you will be informed of launch dates, potential projects, and more! Just sign up to our email list below.