Taiji unveils Hong Kong’s first tokenized property fund

In a landmark decision that signals a new era in Hong Kong’s financial and real estate sectors, Taiji Capital is about to embark on a novel venture by introducing a real estate fund, STO, that marks a new generation of financial and property developments in Hong Kong. The media widely reported this pioneering move, launching the “PRINCE” fund, a closed-end fund designed for professional investors with a bold fundraising target of HK$100 million.

PRINCE’s fund strategy is based on owning and operating five contiguous street-level shops along the booming Prince Edward Road West in Kowloon, one of Hong Kong’s most vibrant commercial centers. The properties’ strategic nature and ability to yield very high rental income drive this decision. Taiji’s innovative approach includes listing the PRINCE token on its centralized digital asset exchange platform, HKbitEX, under the condition of regulators’ approval. The merger will enable access to 24-hour trading and lower the capital costs of financing, improving liquidity and, therefore, the appeal of the investment.

Zhang Zhongyu, VP of Capital Markets and Asset Management at Taiji Capital highlighted that STOs have various benefits compared to other types of finance. He pointed out that traditional methods of raising money, like bank loans, have very high-interest rates, usually up to 5%, so it may be cheaper to employ STOs.

The initial investment criterion for PRINCE is relatively modest at HK$1,000, allowing multiple potential investors to join. Taiji Capital’s capital market and wealth management division’s managing director, Liang Weijin, explained the expected rewards to investors. These returns include rental revenue and a predicted increase in property value. The management of the fund expects to distribute annual dividends based on rental income from the properties, which will cover all associated costs. Properties around Prince Edward Road have also been reported to yield 2-3% for investors.

This concept emerges in Hong Kong, where virtual real estate and other cryptocurrency ventures are in high demand. Notably, Fubon Bank and Ripple are involved in the proposed tokenized real estate system. With Ripple’s superior innovation, the pioneering project is expected to transform how properties are exchanged and managed. This necessitates the tokenization of property liens and loans denominated in digital Hong Kong dollars, with the promise of decreased red tape in real estate lending. The project will make Hong Kong a world leader in IT integration with traditional industries.

Significant changes signal a developing attitude to use real estate in Hong Kong’s thriving property market. Taiji Capital and other institutions are preparing the open and dynamic market by combining a legacy real estate investing approach with current digital technologies. The combination of technology and real estate has the potential to attract a new generation of investors while also setting benchmarks in international markets. These projects will transform investment and transaction tactics in London, one of the world’s greatest financial centers.