A company is now offering “tokenised” real estate investments in Dubai, allowing investors to own a beneficial stake in property investments. Evarei Management, with its Cayman Island-based Evareium Fund, says it is offering a blockchain and smart contract solution.
The investment model is founded on block chain technology, wherein customers buy the Evareium token to secure a stake in a real estate asset. Stefan Hickmott, CEO of Evarei and director of EVM Blockchain Limited, tells us more about the new service.
What problem are you solving?
We estimate that 20 per cent of the GCC real estate market today is institutionally owned; it is 70 per cent globally. Institutional capital creates liquidity and exit options for real estate owners. Evareium institutionalises the type of capital in play.
- Stefan Hickmott, CEO, Evarei Management
Do you operate like a REIT?
Our principles are a private equity fund seeking to generate lucrative capital growth over dividend and cash yield like a REIT. Our fee structure is typical of a private equity real estate fund and heavily performance oriented.
What is the lock-up period?
Those with considerable volumes of tokens will be encouraged to hold their tokens for a minimum of six months. Tokens we may otherwise reserve will not be sold in the market for at least six months.
How much of the money raised will go to buying property?
Based on our target fundraising of $90 million (Dh330 million), more than 80 per cent is expected to be used to buy properties with the balance used to service costs, expenses and fees.
Whose name will be on the title deed?
The name of the special purpose vehicle set up to own the asset, which is turn owned by the general partner of the fund (on behalf of the fund).
What are the legal rights of holders?
The token holders have legal rights to the general partner and related entities to act in their best interests and conduct their activities in accordance with constitution.
How often are the properties valued to which tokens are tracked?
Initially investments may be carried at cost, but typically every year or half-year official third-party valuations will be undertaken.
Will the token owners have recourse to UAE courts?
The token holders’ rights are at the Cayman Islands level so they will have recourse to Cayman Islands Monetary Authority and the Cayman Island authorities accordingly.
