SET-listed real estate developer Origin Property is joining hands with two digital asset companies in launching Thailand's first condo-backed digital tokens, targeting 361 units of three condominiums in central Bangkok.
Through a partnership with initial coin offering (ICO) provider Token X, Origin is now offering more than 19 million tokens at 182 baht apiece for interested investors to purchase. One token represents the ownership of one square inch of the property.
Peerapong Jaroon-ek, Origin's chief executive, said the tokenisation aims to fractionalise real estate assets that previously required a larger investment.
"The tokenisation will transform the property buisness. Previously, only 5% of the [Thai] population could afford condominiums in the central business districts [CBDs]. Now, investors of all classes can access the same properties with this new technology," said Mr Peerapong.
The Real X tokens, which are expected to be issued by June this year, will be backed by Park Origin high-rise condominiums located in three CBD areas which are Phrom Phong (138 units), Phaya Thai (123 units), and Thonglor (100 units).
Mr Peerapong expects that the price of land would continue to rise, as the country's economy has continuously recovered from the Covid-19 pandemic.
"Since the assets are limited, it's like investing in gold, except that you also have returns in the form of rent. Currently, the average rent in Thonglor is around 1,000 per square metre, generating a gross yield of 7-8%," said Mr Peerapong. "The value of the properties is bound to increase because of their prime locations," he said.
Investors are guaranteed minimum returns of 4-5% per year during the first five years. The company would then sell 10-30% of the remaining units and give the returns to the token holders, starting from the sixth year until the 10th year.
Origin and its partners are also in the process of listing their tokens on digital exchanges such as Bitkub and the Stock Exchange of Thailand's Thai Digital Exchange (TDX).
The project aims to raise about 3.5 billion baht. Each retail investor can invest up to 300,000 baht in the tokens.
"Investors who are not very familiar with other types of investments, namely stocks, may find digital token investment less complicated as it requires only a few processes which can be accessed through applications on your phone," said Veraphong Chutipat, chief executive of Real Estate Exponential, Origin's other partner.
Jittinun Chatsiharach, Token X's chief executive, said property-backed digital assets are becoming a significant trend in investment.
"It is expected that more industries will participate in tokenisation in the future, with the regulators working to improve the regulatory framework," she said.
