Tokenized for Everyday Investors: Germany’s Black Manta Capital Partners has launched a security token offering (STO) for Berlin real estate worth more than $12 million.
The project is a collaboration with the German real estate firm Tigris Immobilien and includes around 2000 square metres of real estate in total, mostly comprising individual apartments from 40 to 60 square meters in size. Construction is expected to be complete by 2022 and units will be sold to investors and owner-occupiers.
Token holders will share 20% of the sale profits through securitized participation rights. The company said the tokens will enable ordinary investors “to participate in a profitable real estate project normally reserved for professional investors.”
Minimum investment is just €500
People interested in acquiring tokens can invest a minimum of €500 (nearly $550) up to a maximum of nearly €2 million (around $2.2 million). Black Manta co-founder and managing partner Christian Platzer told Cointelegraph that STOs have a number of advantages over traditional real estate investments, including:
“Lower transaction costs, transferability, tradability. You can invest in real estate today, without going to a notary.”
A Black Manta spokesperson told Cointelegraph that the offering is regulated by the German regulator BaFin, the Federal Financial Supervisory Authority:
“As certain German capital market regulations for retail offerings were applied, we had to limit this offering to German and Austrian investors. A series of other EU-wide offerings, also in other asset classes, are in the making.”
Platzer said Black Manta is a regulated Financial Services Institution under the oversight of BaFin and Germany’s central bank. Obtaining the regulator’s approval for the project had been straightforward he said:
“BaFin had a couple questions to clarify, but that was it.”
The future of STOs
Black Manta said that more STOs will be carried out on its platform this year. The firm reportedly already plans offerings of startup securities, small-medium enterprises and funds.
Looking to the future, Platzer expects a new “tokenization services” industry to emerge and the crypto custodian market to grow. He explained that institutional investors require regulated custodians:
“Especially institutional investors have waited for regulated services to help them with the custody of tokenized assets. In the long run, regulated custody will bring the liquidity of bigger players to a market that is still niche, but growing up.”
Blockchain technology is gaining steam in the real estate market with real estate security tokens now representing half of active security token markets and 15% of total volume. In March, a Japanese firm partnered with a tokenization company to create a funding platform using digital securities to invest in real estate.