So far, investments have been either blockchain-based or property-based in this country. That has now changed: With the new Connex Coin, the tokenized properties are also coming to Germany.
The Connex Coin was presented last year at Expo-Real, the largest real estate trade fair in Europe. The issuer is Raay Real Estate, a joint venture between the real estate companies Wertgrund and Hammer with the IT company Datarella. The Federal Financial Supervisory Authority gave the go at the end of February and soon it will be possible to invest in the new real estate token. In this way, Germany can catch up with other countries such as Luxembourg, where the first real estate token was launched last year.
How do real estate tokens work?
The concept works as follows: By including the object in the blockchain, the object – here the property – can be digitally divided into tokens. The investor acquires tokens, i.e. shares in a specific project. For example, this could be rental income.
In the case of Connex Coin, shares in a subordinated loan that runs until 2024 can be purchased. The minimum value of an investment in Connex Coin is 10 euros and that’s what makes it special. Because the ability to invest little money (and not have to contribute at least 20,000 euros, as in the case of commercial real estate funds, for example), the token opens up the market for enormously large groups of interested parties. That means the token has good liquidity prospects. By doing business via the blockchain, the investment is also safer because counterfeiting is almost impossible.
The Connex concept
The subordinated loan, in which shares are acquired with the purchase of Connex Coin, was taken out for the Connex building erected in Munich in 2015. The building is owned by the Hammer Group, which is involved in the joint venture, is located at Frankfurter Ring 81 and has a rental area of approximately 21,500 square meters. The current value of the building is 100 million euros.
The amount of this subordinated loan is 2.5 million euros and is therefore Raay’s target amount of the investment amounts. An investor receives 3 percent interest on his Connex Coin every year, the contract can be terminated at any time using an app. The purchases and contract processing via app eliminate the need for opaque and complicated intermediate steps for the investor, since the business should also be easy for young or particularly inexperienced people.
The future lies in real estate tokens
Raay believes that real estate tokenization has a future. Managing Director Yukitaka Nezu explains: “In contrast to classic cryptocurrencies, real estate values are behind it, which have a significant impact on value development.” According to him, real estate tokens will be the standard in ten years, writes the “Immobilien Zeitung”. Datarella CEO Michael Reuter writes on his company’s website that the sale of Connex Coin to friends and relatives has already started – but Connex is only the first attempt. According to him, Raay Real Estate plans to tokenize further properties in 2020 after Connex Coin. He mentions that over time, Raay Real Estate will also launch private tokenization services.
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