Family-owned property firm Stan Group — which represents the assets of “shop king” real estate scion Tang Shing-bor — is set to meet with Hong Kong’s securities watchdog in January 2020 to seek approval for the sale of tokenized real estate assets. Hong Kong English-language newspaper South China Morning Post (SCMP) reported the news on June 12.
Stan Group is reported to have a real estate portfolio estimated at over HK$50 billion ($6.38 billion).
Against the backdrop of reportedly lacklustre sentiment in the local property market amid escalating trade tensions between the United States and China, the firm is seeking a locally unprecedented approval from Hong Kong’s Securities and Futures Commission for the regulated trading of blockchain tokens that would have real estate as their underlying asset.
Earlier this month, Stan Group reportedly signed a memorandum of understanding with local security token insurance platform Liquefy to jointly explore the possibilities of real estate tokenization, which can enable investors to own and trade blockchain tokens that confer ownership of a property — in whole or in part.
In an official statement, Stan Group chairman Stan Tang Yiu-sing said that they “envision far better access and greater liquidity in the real estate market due to the fractional ownership that will be attained with tokenisation and our real estate exchange under development.”
According to Liquefy CEO Adrian Lai, asset owners would set the initial launch price of the future tokens. He outlined that investors would be able to trade tokens either from asset owners or from Liquefy’s partner securities brokerage firm.
As Edwin Lee — founder of the SFC-licensed advisory and asset management firm Bridgeway Prime Shop Fund Management — told SCMP, the regulatory framework for securities token trading in Hong Kong is complex and demands that investors undergo a strict anti-money laundering process with extensive disclosures and paperwork.
Moreover, only professional investors with liquid assets worth in excess of $1 million are able to participate in such trades: according to Lee, there are ostensibly only around 100,000 such people in Hong Kong that would qualify.