Taiji Capital and Hong Kong’s First Tokenized Real Estate Fund

Summary

• Taiji Capital's subsidiary, Pioneer Asset Management, has introduced Hong Kong's first real estate fund Security Token Offering (STO) called "PRINCE" for professional investors.
• The fund aims to raise HK$100 million to acquire ownership rights to five interconnected shops on Prince Edward Road West in Kowloon.
• With the entry barrier set at HK$1,000, PRINCE tokens will be listed on HKbitEX, Taiji Capital's virtual asset trading platform, pending regulatory approval.

Investment firm Taiji Capital, via its subsidiary Pioneer Asset Management, has today unveiled Hong Kong's inaugural real estate fund Security Token Offering (STO), according to reports from local media outlets. This "closed-end fund" named “PRINCE” is exclusively designed for professional investors, with an ambitious target of HK$100 million in funding.

The capital raised from PRINCE will be earmarked for the acquisition of ownership rights for a cluster of five interconnected shops situated along Prince Edward Road West in Kowloon. Taiji Capital has plans to list the PRINCE token on their virtual asset trading platform, HKbitEX, ensuring 24-hour trading and reduced financing expenses, pending regulatory approval.

Zhang Zhongyu, Vice President of Capital Markets and Asset Management Business at Taiji Capital, underscored the benefits of STOs, citing lower financing costs compared to traditional methods like bank loans, which often involve interest rates as high as 5%.

At the moment,  the initial investment requirement is set at HK$1,000. Liang Weijin, Managing Director of the group's capital markets and wealth management business, clarified that investor returns will encompass rental income and anticipated property value appreciation. Annual dividends will be distributed among investors based on store rental income, after deducting associated costs. Similar rental properties along Prince Edward Road currently yield returns of 2 to 3%.

Hong Kong has recently witnessed a surge in interest in virtual real estate. Fubon Bank, for instance, has plans to launch a real estate tokenization initiative in collaboration with Ripple, aimed at transforming property transactions and operational streamlining using Ripple's technology, which involves tokenizing property liens and facilitating loans in digital Hong Kong dollars. This initiative is slated for implementation in the third quarter.