Smartlands Platform presents the list of front-runners for its pipeline of assets to be considered for asset tokenization by the Smartlands Platform community
The past several years have taught us that cryptocurrencies are solving problems that can’t be solved any other way. The world now has a global money transfer model, which today uses second-layer technologies and smart contracts that make the model scalable to VISA numbers. Consumer asset financing in emerging markets today is getting a second wind because making cross-border payments any other way than in crypto is too cumbersome and expensive. And of course, decentralized investing, which now flourishes in the majority of countries. Access tokens such as SLT and others are paving the way to integrated securities trading platforms where shares of tokenized assets can be traded like regular stocks.
Real estate has always been one of the best-performing assets whose competitive dynamic makes it an ideal target for tokenization. The equity locked in a property due to debt or any other obligations can be quickly and easily released through the issuance of tokens, which will represent the value that can change hands on a trading platform at any given time. This kind of liquidity in an otherwise illiquid asset is rightly considered a Holy Grail of investing.
With this, Smartlands Platform is thrilled to present to the community and investors a pipeline of five pilot projects we’ve selected based upon the current market conditions in the respective areas where the assets are situated, and the initial investment amount needed for successful tokenization.
The Security Token Offering (STO) will commence after the community vote and as soon as the legal framework for token issuance is finalized.
Only SLT token holders are eligible to participate in the vote and the subsequent tokenization project. However, due to frequent requests from investors in South-East Asia, the Smartlands Platform is actively pursuing the possibility of adding Binance Coin (BNB) to the pool of cryptocurrencies eligible to participate in the future Smartlands Platform projects.
Unfortunately, until the Platform’s offer is accepted by the owners of assets in consideration for tokenization, for legal reasons Smatlands Platform is unable to disclose all available information about the assets.
The vote will take place on the Smartlands Platform website. The voting process will begin shortly after the announcement is published but no later than Noon of November 1, and will continue for two weeks from the time of the announcement. All votes are final, so voice your opinion only after careful analysis of data provided by the Smartlands Platform. We encourage you to join the Smartlands Platform Telegram channel and through all other available means of communication with the Smartlands Platform ask as many questions as you see fit to avoid any confusion or misunderstanding that may arise during the selection process.
RESIDENTIAL PROPERTY IN MANHATTAN, NY
The Market: The residential real estate market conditions in the heart of New York are as strong as ever. While closings fell 10% in Q3, 2018, the 3,327 sales volume is an increase of 5% compared to Q2, 2018. Price statistics exhibited mixed signals this quarter as the price per square foot declined while average and median price increased. Even though the average and median price per square foot were both down 3%, the average and median price statistics rose 2% due to an improved market share of apartment sales with two or more bedrooms, which actually drove resale co-op median price to a record high, and resale condo median price to its second-highest figure ever.
Average days on the market remained below the 100-day threshold but still rose 9% annually to an average of 97 days, which, notably, makes it lower than in Q2.
The Property: a commercial/residential luxury tower with units on fifteen floors built right in the heart of the historic Chelsea district. The building comprises approximately 1800 useable square meters with one elevator, 20+ residential units and a commercial space ideal for a retail operation. The luxurious accommodations include two apartments per floor, video intercom, fireplaces, 2,8-meter ceiling with split-system A/C, private outdoor balconies, a patio, and two private outdoor spaces with a common roof attached to two duplex penthouses.
The asset is a true gem ripe for tokenization; the 421a tax abatement allows for the property to either generate excellent rental income or for the select units to be sold separately as condominiums (the offering plan is already approved).
LOGISTICS CENTER IN WARSAW, POLAND
The Market: The logistics market in Poland is the largest in Central and Eastern Europe. It accounts for around 16% of Poland’s total volume of investments in 2013-2016. The majority of the supply of over 12 million sqm of modern-built space for logistics is concentrated in Poland’s five most developed regions:
Upper Silesia 18%
Central Poland 13%
Logistics in Poland is a very vibrant market that’s been developing at a double-digit pace for the last eight years; the record low level (4.3%) of industrial space vacancy in the Q1 2018, is a clear indicator of an important trend.
Retail operators, as well as the automotive industry with increased demand driven by e-commerce, are seeking light industrial property and the current space on offer, though exceeding 2 million sqm per year, is not enough to fill the market. The total of 27% of industrial properties in Q1 2018 had been occupied by tenants representing the logistics sector with the record of EUR 3.24 billion in investments volume. Yields for prime locations are now around 6.85-7.00% for modern warehouses leased to single financially strong tenants with contracts for no less than ten years. The multi-let warehouses command a 7.50-8.00% yield if leased at market rental levels.
The Property: A Logistics center with more than 5,000 sq. m. of leasable area, excellent location on the intersection of two highways, built in 2015. The building comprises loading docks, two floor-office blocks, parking for employees. Leased under a 15-year contract (option for a 5-year extension) to one tenant through a local deposit system administrator. The property was adjusted to adopt the tenant’s needs. However, it can easily be used by various production and logistics purposes. The rent income is approximately $40,000 a month.
COMMERCIAL OFFICE BUILDING IN VILNIUS, LITHUANIA
The Market: The record investment volume of Vilnius commercial property market seemed unbreakable when it hit EUR 190 million in 2015, but by the end of Q4 2017, the number’s gone up to EUR 224 million. Vilnius is booming along with the rest of Lithuania, which leads the commercial real estate market in terms of volume of investment with EUR 321 million (over half of the total investment volume for the Baltics region).
International investors give Lithuanian commercial real estate markets a vote of confidence with a total of EUR 4.4 million in transactions for 1HY 2018 (EUR 4.0 million in 1HY 2017). Foreign entities make almost half (48%) of total investment volume in 1HY 2018 in Lithuania.
Investments in the clerical properties segment accounted for 38% of the total volume of investments with Vilnius shining as a clear front-runner attracting serious institutional money, which is drawn to the city’s multiple Class A properties with vacancy way below 1% and stable yields of 6,5% across the specter of assets on offer.
The Property: A Seven-floor office building in good condition constructed in 2012 with a land plot of 1,200 sqm intended for commercial use. Leasable area – 2,500 sqm. Parking – underground and above-ground 70 places.
A DIVERSIFIED COAL MINING COMPANY IN KENTUCKY, US
The Market: Global demand for metallurgical coal is exceeding the currently available supply and projected to show even more robust growth in the intermediate future making its economics favorable to tokenization.
The most efficient companies on the metallurgical coal market can keep their costs of production significantly lower than their competitors by committing to structural changes enabling high margin and survivability during troubled times.
Companies that are at the low end of the met coal cost curve (mid-$50’s on an average basis across the current production and future production) can see an immediate reduction in overall production costs due to fixed costs (such as environmental and reclamation) being spread over more tonnage of production. Global Market will remain volatile, bringing met coal producers and investors tangible benefits from both upward spikes and downturns due to the intricacies of the market management and specifics of the operating styles attributed to some of the new players. With recent coal market down-cycle, there’s been a “changing of the guard” to younger companies that are more agile to the ever-changing markets and are ready for true innovation.
The Project: A Diversified Energy Company focused on the extraction, processing, and transportation of metallurgical coal. Through its wholly-owned subsidiary, the Company is focused on mining and selling specialty coal qualities, serving the metallurgical, industrial, pulverized coal injection (PCI), and premium thermal markets. Most of the mining operations are in Eastern Kentucky; the Company is headquartered in Fishers, Indiana.
The Company’s business model is to capitalize on the changing coal market to re-define how to create efficient operations to thrive in an industry with less scale and production. Through the issuance of a Security Token, the Company will be able to serve investors who are looking to diversify its product portfolio and, as a result, take advantage of new liquidity in the ever-volatile coal markets.
The Company has two permits in production with over 30 permits that can go into production over the next few years. Tokenization will expedite organic growth and significant acquisition opportunities. Large asset base, when tokenized, will provide diversification to market conditions (Met Coal, PCI, and specialty products). Near-term expansion of Revenue and GAAP earnings will boost the ability to increase operating margin expansion. By tokenizing the asset, which, in turn, will snowball into even higher gains for investors when fixed costs will be spread out over additional mines as they come online, we will maximize profitability.
INDUSTRIAL UNIT IN LONDON, UNITED KINGDOM
The Market: The annual demand from the South East London industrial property market is stronger than ever due to limited availability of versatile supply, which makes rent income steady and high. The continuous supply/demand imbalance puts upward pressure on rents at the prime end where the scarcity is most pronounced. Over the past four years (mid-2013 to mid-2017) compounded prime headline rents in the region rose by an average of 5%.
The supply remains low compared to historical standards, and the rental income is expected to grow. The latest forecast by MSCI Index indicates rental income increase of 4.8% over the next five years for conventional industrial units in London and 3.0% for industrial units in the inner South East area over the same period.
Wokingham has traditionally proven popular with commercial tenants as a strategic transportation hub for shippers and distributors with excellent links into London and the South East.
Commercial properties in this micro-market are well-positioned with a specific focus from long-term prospective tenants.
The Property: The Property: An industrial estate comprising three 1980’s-built units totaling a Gross Internal Floor Area of c. 2,000 sqm located in 55 km west of central London and 40 km west of London’s Heathrow Airport.
The complex is strategically positioned in a long established, industrial and commercial area near the M3, M4 and M25 motorways, a railroad station is approximately 1 km from the property and provides frequent services direct to London Waterloo with a journey time of about 1 hour, while direct services to Reading have a journey time of 15 minutes.
The units are currently multi-let to several tenants on separate leases and produce a total rental income of approximately $200,000 per annum, reflecting a low average rent per sqm overall.
The site provides an area of approximately 0.4 hectares which represents a site cover of roughly 48%. The units range from 500 sqm to 1,000 sqm of steel portal frame construction under pitched metal roofs. All units benefit from office accommodation at ground and first floor levels.
Information, not advice
Our publication do not offer investment advice and any information we provide should not be construed as investment advice. We provide information and education for investors who can make their investment decisions without advice.
The information contained in our publications is not, and should not be read as, an offer or recommendation to buy or sell or a solicitation of an offer or recommendation to buy or sell any securities. Our publications are not, and should not be seen as, a recommendation to use any particular investment strategy.
NOTE: Only SLT token holders are eligible to participate in the vote. The vote will take place on the Smartlands Platform website and is intended for general assessment of the investors’ preferences in regards to selecting an asset for tokenization. The results of the vote will have a crucial impact on the decision-making process, however, due to unforeseen circumstances, changes in market conditions and legal considerations, the final project selected for tokenization may not correspond with the results of the final vote.