A building on Zurich’s most exclusive shopping street has been converted into a blockchain-powered investment following its CHF130 million ($134 million) sale. It is the latest attempt to unlock the value of bricks and mortar using digitally-coded tokens.
This content was published on
2 minutes
When not covering fintech, cryptocurrencies, blockchain, banks and trade, swissinfo.ch's business correspondent can be found playing cricket on various grounds in Switzerland - including the frozen lake of St Moritz.
Bahnhofstrasse 52, which houses offices and a Swatch retail outlet, was bought by Zug-based real estate investment firm BrickMarkExternal link on Wednesday. The company has issued digital tokens, underpinned by a bond, which can be bought and eventually traded by investors who want a slice of the building’s rental income and increase in sale value.
BrickMark funded about 20% of the purchase by giving the seller, RFR Holding, a batch of its newly created tokens. This means that RFR Holding retains a stake in the future income of the building.
“There has never been a token-financed transaction of this magnitude,” said BrickMark CEO Stefan Rind in a statementExternal link. “We are implementing what was once no more than a concept in the real estate industry.”
The Bahnhofstrasse buildling is the first of a planned global real estate portfolio that could be worth upwards of CHF1 billion, the company said. BrickMark is accumulating a €50 million cash stockpile from investors but also intends to part-finance further acquisitions with its tokens.
Smart contracts
The tokens are created by drawing up digital “smart” contracts that entitle holders to a share of the portfolio’s financial spoils (they could also result in losses if the properties lose value).
The tokens are created and traded on a blockchain – a digital platform that proponents believe is a much more efficient system than the current paperwork-based method of buying and selling properties. The smart contracts embedded in the tokens can also be custom-made to automatically carry out a range of functions, such as paying dividends and fees.
BrickMark is the latest in a growing list of blockchain companies setting their sights on the real estate market. Last year, a consortium led by blockimmo converted a Swiss building into digital shares and sold a 20% stake to investors over the blockchain.
More recently, Geneva-based company WeCanExternal link tokenized two properties in Portugal in a €11 million deal, which it plans to repeat across other European countries.
What do you think Switzerland’s Alain Berset can bring to the Council of Europe?
The former interior minister is to become the first Swiss Secretary General of the Council of Europe – which issues should his five-year term focus on?
How is your country dealing with the return of stolen artifacts?
Western nations like Switzerland often have to deal with the process of recovering or returning looted artifacts which have been illegally imported. What’s the situation like in your country?
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Is blockchain real estate in need of renovation?
This content was published on
Property has been hailed as prime real estate for blockchain disruption. But has the innovation come too soon for the industry?
This content was published on
Proptech start-up SwissRealCoin's gripes about FINMA reveal that tension still exists between the growing Swiss blockchain sector and the country's financial regulator.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.