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Digital securities platform iSTOX tokenizes real estate fund
Accredited investors gain access to Reit invested in European office properties
7 Apr 2021 | The Asset

Singapore-based private market platform iSTOX has announced the issuance of digital tokens that give accredited investors access to Mapletree Investment’s latest office fund, the Mapletree Europe Income Trust (MERIT).

Temasek-owned Mapletree is a global real estate asset manager with more than S$60 billion (US$44.83 billion) of assets under management. MERIT is a 507 million euro (US$601.64 million) private real estate investment trust (Reit) invested in Grade-A office properties in Europe.

The fund targets a 12% internal rate of return, and will be managed by Mapletree Real Estate Advisors, a wholly-owned subsidiary of Mapletree.

It is fully invested at closing and consists of seven Grade-A office properties totalling approximately 270,000 square metres with a total asset value of 1.2 billion euros. MERIT has a term of five years with provision for two one-year extensions and will make distributions on a semi-annual basis in euros.

A part of the fund has been made available to individual accredited investors in tokenized form and in smaller units.

Oi Yee Choo, chief commercial officer of iSTOX, says: “For an individual accredited investor, real estate funds can form a valuable component of  a diversified portfolio because of the stable income they generate. But generally speaking, smaller accredited investors find it very difficult to gain access to private real estate funds because of the minimum investment amount. With tokenization, iSTOX enables that access by using blockchain and smart contract technology to overcome manual processes in the life cycle of a security – including the issuance, custody and post-sale management phases.”

Primary subscription for individual investors via iSTOX closed last month. Subscribed units are now listed on the iSTOX exchange for secondary trading, providing existing accredited investors liquidity and new accredited investors a chance to participate.

The private real estate market is about 32 times the size of the public real estate market, according to a Bain report last year.

Founded in 2017, iSTOX is fully regulated by the Monetary Authority of Singapore as a multi-asset digital securities platform for the issuance, custody and secondary trading of private market products, such as hedge funds, wholesale bonds and private equity.

It is backed by Singapore Exchange, Temasek-subsidiary Heliconia Capital, and Japan government-backed investors JIC Venture Growth Investments and the Development Bank of Japan.

Individual accredited investors using the iSTOX platform today come from 24 countries, spanning Asia, Europe, the Americas (excluding the United States), Australia and New Zealand.