Knight Dragon, a London-based developer owned by Henry Cheng of Hong Kong, is offering investors a share of the profits from one of Britain’s largest urban renewal projects using blockchain technology.
Knight Dragon announced on Tuesday that it plans to issue 100,000 security tokens. The tokens, called KDB4, will entitle its holders to a share of 80% of the gross profits generated by Knight Dragon’s Building 4. The 191-tower tower is part of the Upper Riverside complex, an apartment complex within the company’s remarkable Greenwich Peninsula project . .
Knight Dragon estimates that KDB4 will cost £ 140 million ($ 172 million), but has not yet confirmed the date the tokens expire. Token holders will also be given priority to invest or buy future offers on the Greenwich Peninsula.
“We have experience as business pioneers and the fast-growing blockchain economy offers exciting new opportunities for Knight Dragon,” wrote Cheng, chairman of Knight Dragon. Forbes in email. “Our leadership team is always open and looking for innovative initiatives that can add value to our business.” Cheng added that Knight Dragon will explore the possibility of applying tokenization to other real estate in the company’s portfolio.
Security tokens are digital forms of ownership of traditional assets, such as stocks, bonds, real estate or economic rights. By using blockchain technology to conduct token transactions, underlying assets can be more easily traded among a wider investor base.
“Building tokenization is set to revolutionize the global real estate industry and we are pleased to be a leader in this revolution,” said Sami Lee, founder and vice president of Knight Dragon. “Being the first company to token an entire building in Central London meets our bold vision for the global real estate industry.
Knight Dragon is privately held by Cheng, who also serves as chairman of his family’s flagships New World Development and Chow Tai Fook Jewelery, both of which are publicly listed in Hong Kong. The 75-year-old is worth $ 26.4 billion as of February, Forbes ratings, placing him and his family 3rd on the list of the 50 richest in Hong Kong.
Knight Dragon has said it is investing £ 8.4 billion ($ 10.3 billion) in the Greenwich Peninsula, a project that promises to redevelop what was once an industrial area along the River Thames in south-east London. The company took full ownership of the 147-acre (6.4 million square feet) site in 2013 and has set out a 25-year development plan since then.
The Greenwich Peninsula project could eventually include more than 17,500 homes, approximately 84,000 square feet of retail and retail space, and 20,000 square feet of cultural attractions, Knight Dragon said in its annual report for the year ended March 2021. The company’s previous projects include the construction of a luxury apartment tower and the refurbishment of a 5-star hotel in London.
Security tokens have gained popularity in recent years as financial supervisors in some jurisdictions, including the United Kingdom and Hong Kong, began issuing asset-related regulations. Tokens are increasingly used by companies as a means of raising capital.
Among the companies that came into contact with the technology was Stan Group, a real estate company run by Stan Tang, the son of the late Hong Kong billionaire Tang Shing-bor. Stan Group announced in 2019 plans to token real estate in Hong Kong, the most expensive real estate market in the world.