Cygnes Real: the first real-estate investment platform to use tokenisation, enabling fast, accessible and low cost fractional ownership of property

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Global commercial property investment reached an unprecedented high of $830 billion in 2019\. Property development is traditionally one of the most illiquid asset classes, requiring significant capital commitments and entailing long, expensive transaction processes. Until recently, the concept of fractional ownership had been employed to address this barrier to entry principally in the form of real-estate investment trusts (REITs) in the US. These have enabled investors to acquire a fractional ownership interest in a portfolio of real-estate properties, that have outperformed other major asset classes over the long run (KPMG, 2020). However, the cost of setting up REITs listed on regulated stock exchanges is very high (up to $1m). This requires a significant upfront capital requirement which is especially prohibitive for single property developments. Growing demand from new investors for increased access and from existing investors for greater liquidity gives an impetus to transform the real-estate investment landscape. New technologies are needed to bring greater efficiency, higher security, and lower costs to the financial industry as well as investors.Cygnes Real will complete an 18 month Industrial-Research project in order to develop the first real-estate investment platform to use tokenisation, enabling fast, accessible and low-cost fractional ownership of property, to provide new funding options for UK property developers and UK focused private equity real-estate funds. Cygnes Real will issue/administer security-tokens registered on a leading blockchain to crowdfund property developments. Investors can purchase a tokenised share in a development and trade this digital security on a regulated digital secondary market in the UK. This will facilitate liquidity and open up real-estate investments to a broader range of investors, revolutionising the financial industry. The company will give investors access to carefully selected investment opportunities previously only available to institutional investors, such as top-tier property developments and real-estate private equity funds. In addition to enabling fractional ownership, they can be securely managed as a digital record, automate investor due diligence and compliance protocols, and allow transaction settlements to be completed digitally. These changes will significantly reduce the time and economic costs associated with trading previously illiquid assets, benefiting both asset owners and investors.Cygnes Real will partner/integrate with the first UK regulated digital secondary market (MTF) Archax, facilitating the goal of asset liquidity in the private markets.