The first project set for tokenization is River Plaza, a 180-unit luxury residential development that is located on the banks of River Irwell and directly opposite of Castlefield in Manchester.
In collaboration with tZERO, Tezos Foundation, and Megalodon, Alliance Investments’ River Plaza project is the UK’s first real estate-backed security token offering (STO) and one of only a handful of real estate STO’s worldwide.
Alliance Investments intends to tokenize at least £20m of the value of River Plaza. The River Plaza STO will feature tZERO’s tokenization technology services, Tezos’ blockchain protocol, and Megalodon’s advisory services. River Plaza’s use of tZERO’s security token protocol will make it compatible with tZERO’s secondary trading technology by leveraging an alternative trading system operated by PRO Securities, LLC, a subsidiary of tZERO, as a path to unlock liquidity for investors. The STO is expected to launch in Q1 2020.
“Raising funds through an STO is more efficient, cost-effective, autonomous and democratic than traditional financing. We believe that we are at the forefront of a technological change that can disrupt the current funding paradigm and we are delighted to partner with two global players that are leading blockchain innovation, tZERO and Tezos, for our first STO.”
– Alliance Investments CIO Rani Zahr
A real estate-based STO is the process of issuing digitally-enhanced equity securities in a holding company that owns the real estate asset. More generally, security tokens can be structured to represent a variety of ownership and economic interests in an underlying asset, such as equity in a company that owns the asset, an interest in debt secured by the real estate, a stream of income based on cash flows from the asset or an interest in the capital growth of an off-plan project, to name a few.
“We firmly believe that digital securities represented by security tokens are the next generation of how the world will trade value. Tokenizing real estate will democratize access to this traditionally exclusive asset class, and we are thrilled to partner with Alliance Investments to advance our goal of tokenizing and trading all assets.”
– tZERO CEO Saum Noursalehi
The £500m of real estate projects will be tokenized over the next several years in all parts of the UK with projects ranging from residential and student accommodation to commercial and hospitality properties.
“We are impressed by Alliance Investments’ entrepreneurial vision to redefine real estate ownership and tZERO’s mission to make liquid assets available to a broad audience. It is our mandate to power real-world use cases of blockchain adoption with the most advanced open source technology, and we are excited to work with Alliance and tZERO to make this a reality.”
– Tezos Foundation Board Member Hubertus Thonhauser
The River Plaza building is scheduled to complete in Q3 of 2022.