Real estate investing is an increasingly favorable method of wealth-building, and there are many ways for individuals to invest in it. However, traditional real estate investment models have immense barriers to entry. They create an onerous burden in terms of both regulatory and financial aspects that makes investing unfeasible for most of the potential investors.
Mitigate These Risk and Overcome Investing Challenges
So, if you are looking to invest in real estate perhaps in a foreign country, in addition to the significant capital required for purchasing the asset itself, you would generally need to incorporate a local entity as an investing partner since investment by foreign investors is restricted in most jurisdictions. You will also need to fulfill other statutory requirements including and not limited to taxation, accounting, and many other registration obligations as well as restrictions on the type of property funds.
Furthermore, foreign direct investment also has vulnerability attached to it in terms of micro and macroeconomic conditions in each country. To mitigate these risks and overcome investing challenges, the market offers Real Estate Investment Trusts (REITs) as an alternative investment vehicle. A REIT is a trust, corporation or an association that owns, or finances income-producing real estate and can be publicly listed or privately owned.
Asset Value of USD 10 billion
Global REIT is the first ever Blockchain based Sharia-compliant REIT to be launched in the cryptocurrency space today. It is offering investors exposure to the real estate market on a global scale without the necessity of acquiring an entire property and shift the management and compliance obligations to the fund manager. At first, Global REIT will acquire assets from the UAE and rapidly acquire more assets from other jurisdictions worldwide. The first AUM (Asset under Management) will have a Net Asset Value of USD 75 million. Gradually by the end of 5 years, Global REIT is projecting an Asset Value of USD 10 billion.
The firm has decided to leverage the power of blockchain technology to build a world-class, robust platform on the Ethereum blockchain, powered by the strength and reliability of smart contracts to create custom asset tokens (GRET). The GRET token is based on the ERC20 standard which means the token will be tradable on all token exchange platforms, unlocking rapid, simpler, cheaper, and more secure trading than traditional REITs.
Global REIT has its pre-ICO scheduled to start from 1st May and ends 31st May 2018, during which it will offer Dual Utility tokens to its subscribers; Global REIT Fund Manager Token (GREM) and Global REIT Asset Token (GRET). This means that each ICO subscriber is entitled to a share in the Fund Management Company (GREM) and returns from the Asset Owning Company (GRET), besides the utility attached to each token. Publicly listed REITs will be liquid investment vehicles. Token holders of Asset Owning Company will be paid monthly dividends from their participation in the Fund Management Income, which is quite unlike traditional REITs.
Global REIT claims to be the first ever Blockchain-Based Sharia-Compliant REIT to be launched in the market.
According to the platform, “It will start with a Net Asset Value (NAV) of USD 75 million and will reach USD 2 billion by end of 3 years. The first ICO will take place with 90 million coins for sale. The investment made by token holders will be invested in tangible assets which will generate income for all shareholders.”
The domain Globalreit.io was registered by one Ali Tumbi on the 15th day of January, 2018. The ICO will be structured in a way that each investor will be issued 2 tokens.
The company’s vision and idea of putting a REIT on the Blockchain is welcomed and Dubai is well-suited as a starting point for their investment activities, given the large number of real estate investment opportunities there as well as many other REITs.
According to Global REIT’s white paper, each subscriber will be offered two tokens:
- GREM: Global REIT Fund Manager token
- GRET: Global REIT Asset token
GRET is the token that is backed up by the real estate assets the company plans to invest in. This token will, according to the white paper, pay out a monthly dividend in US dollars and Tether (USDT).
It is unclear exactly how much the monthly dividend to holders of the GRET token will be, but the white paper states that GRET holders will earn a “stable ROI of 8% p.a. on its first acquired asset.”
Ali Tumbi is named as the founder. The second most senior person listed on the website is Chief Operating Officer Paul Christodoulou. He is currently working as Managing Director for Sotheby’s International Realty in the Gulf Area.
However, Global REIT’s blog on Medium lists Mr. Christodoulou as CEO of the company, contrary to the information given on their website and in the white paper.
Token Type: Utility (Security)
Platform: Ethereum ERC20
Pre-ICO: May 1 to May 31, 2018
Public ICO: June 1 to June 30, 2018
Token Supply: 75 million (GRET)
Tokens Available for Sale: 16,650,000
Price: 1 GRET = $1 (1 GREM = $0.07)
Minimum investment: 0.1 ETH / 0.01 BTC
Payments Accepted: ETH, BTC, USD
Jurisdictions Barred from Participating: None
More information about Global REIT is available at – http://globalreit.io/
It is a case of so far so good for Global Reit . Stay tuned as we research more into this …
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