Japanese residential and commercial real estate developer, Lead Real Estate, has announced its intentions to host an upcoming capital raise. Through an alliance with various service providers (Securitize, GRIP, Rialto), Lead Real Estate will be hosting this event on a global platform.
The capital raise will take shape as a digital securities offering (DSO), as Lead Real Estate hopes to provide the most cost-efficient exposure for interested investors. Although Lead Real Estate hasn't announced how much equity will be sold, they indicate that it will be a multi-million dollar event.
Help from a Trio
Those that will be helping Lead Real Estate, each bring different specialties to the table. Accordingly, throughout the course of the capital raise, the following companies will be tasked with different roles.
- As an investment bank within the Dubai International Financial Centre (DIFC), GRIP will assume the role of a financial advisor, and manager of the capital raise.
- A leader within the digital securities sector, Securitize will be providing the tech stack necessary for the creation and issuance of digital securities sold throughout the event.
- Through leveraging their registration and licensure with the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA), Rialtos’ participation will allow for this event to be accessible on a greater scale. This means that a greater amount of investors from around the globe will be eligible to participate.
While Lead Real Estate has not provided specifics regarding the amount of equity it is making available, it did provide insight into how they expect investors will be rewarded.
- 5% p.a., in the form of dividends
- 10-20% p.a. of net profit
Cumulatively, Lead Real Estate expects that these will equate to a 6-8% return. It is important to note, however, that these are simply expectations. As with any investment, there are no guarantees.
An Adjacent Path
To date, one of the most popular implementations of digital securities is to tokenize real estate. As a high-potential asset class, often plagued by low liquidity, many believe real estate the perfect sector for a revamp.
Lead Real Estate, however, has chosen to travel a path adjacent to what we have seen thus far. While most companies have focused on the tokenization of real estate itself, Lead Real Estate is looking to leverage digital securities by selling off a portion of the business.
This means that for interested investors, while the sector remains the same, their exposure pivots; profitability hinges on the successes of Lead Real Estate as a whole, rather than a singular asset under their control.
Upon announcing this event, representatives from each, Lead Real Estate and Securitize, took the time to comment.
Eiji Nagahara, CEO of Lead Real Estate, states,
“At Lead Real Estate we believe in delivering value to our customers across the whole range of our business activities, so pioneering an instrument that is exactly designed to improve efficiency and reduce friction, whilst providing global access to one of the world’s largest metropolis, Tokyo with a population of 38 million is an ideal solution to achieve our capital goals”
Carlos Domingo, CEO of Securitize, states,
“Securitize is particularly proud to be the technology provider for Lead Real Estate’s digital security issuance…This deal not only validates our belief that Japan will continue to be a global leader in developing digital securities, but also showcases how the technology is solving real issues for larger, more established companies by providing a cost effective and compliant solution for issuing and managing private securities on a global scale.”
Lead Real Estate
Founded in 2003, Lead Real Estate is a property developer, based out of Tokyo, Japan. In the time since its launch, the value of assets under its control has grown to roughly $65million USD.
CEO, Eiji Nagahara, currently oversees company operations.
In Other News
Japan is en route to becoming synonymous with blockchain based endeavours. Only days ago, we were discussing developments surrounding Boostry, and the entrance of new stakeholders in the digital securities issuance platform.
Between the DSO discussed here today, recent investments in Japanese companies, and on-going government research into central bank digital currencies (CBDCs), the ‘land of the rising sun’ appears poised to become a leader in world of blockchain.