Naki Group is leading the first tokenised real-world asset investment project in Cambodia. By creating a blockchain-based token that is legally backed by the luxury Silvertown Metropolitan property and making it available for both local and international buyers to invest, they are showcasing the ability of the technology to provide greater access and transparency to historically exclusive opportunities.
Naki Group announced the launch of the first tokenised real estate investment offering in Cambodia via Silvertown Token (STM) which has been offered to investors since the start of Q4 2022.
Veasna Meas, Chief Executive Officer at Naki Group Co Ltd is spearheading the utilisation of blockchain and is adamant it is beneficial in Cambodian property development.
He says: “This is easing investment in Cambodia, and by utilising blockchain technology, it's really transparent in terms of the access to information. Usually buying a property in Cambodia involves a lot more steps than buying in a more developed country such as the United States.
So what we do is remove the hassle and the risk of information asymmetry when investing and buying in Cambodia by utilising the tech. This helps us as a developer to liquidate and move on to more projects, but as an investor, it's about access to an asset class which they may never have thought about before.”
Blockchain Offers Consumer Protection Through Transparency
Veasna says that lumping blockchain together with Bitcoin and cryptocurrency is not right, and the crypto space has been in the limelight for too many of the wrong reasons of late. Blockchain, however, is about transparency - and with this tokenisation of Silvertown - it’s about providing opportunities for investment.
“This investment opportunity with Silvertown is open to anyone who is an accredited investor. We are registered in the US, and as a regulated company, follow the U.S. Securities and Exchange Commission (SEC) rules which are in place to protect the consumer. This is a real-world asset and investors can even come and see the property at Silvertown Metropolitan in Phnom Penh - that's a huge difference between blockchain in this case and with crypto.” adds Veasna.
To conduct the offering and subsequently manage token holders, Naki Group has chosen to partner with TaroFi. The TaroFi platform enables Naki to provide their token holders with real-time information about the performance of the property, trading capabilities, and direct distributions. TaroFi provides users with custodial accounts that they can safely receive distributions to, invest out of, and hold their tokens without the need for a digital wallet, however token holders have the option to self-custody.
To register, anyone interested can simply go create an account on TaroFi and submit to a KYC (Know Your Customer) and pass Anti-Money Laundering check to begin investing. All of the information including the operating history of the property, information on the company, and contractual agreements are available on the platform.
Why The Tokenisation Model And Blockchain Will Work?
Veasna believes the tokenisation aspect via the blockchain is beneficial to all involved, and in addition to the transparency, flow of information, accessibility, diversification, and generating liquidity, he feels it will help first-time investors feel comfortable in investing and make use of this technology.
“I believe in it because it can be a win-win situation. As a developer, it will allow us to open the door to raising capital and move on to a new project. Usually, you would need private investors or banks to be involved but using the blockchain and tokenisation opens it up to new investors and a potentially bigger pool of investors - so it can raise capital much easier and faster and enable us to move onto new projects compared to traditional fundraising.”
For the investor and token holder, he says “This is a new avenue of investment and income. If they usually are looking at buying a house as their biggest investment, or maybe even two houses, at a certain point they are tapped out and can't buy anymore. But with tokens, they are able to invest in different properties that they couldn't access before.”
Veasna also believes this project will show proof of work so moving forward, they might have other projects which will be tokenised but they may even look at running a real estate fund which could stay live.
How Does Investment Work?
The Silvertown tokenisation development project works on two fronts. Silvertown Metropolitan is a 111-unit luxury condotel in the heart of Phnom Penh’s business district and it was built in 2014.
There are 34 units available under this tokenisation scheme, and Veasna says: “We know the generated income at Silvertown and we operate nearly like a hotel - so customers book to stay at the property which generates rental income from long-term rentals, say 6 months and above.”
Secondly, there are units being sold too. “The token holders (investors) will have rights to the profits of the sale of units. If for example each unit is approximately USD $200K, and if we sell them for $250K, that $50K is gross profit that goes to the token holders. So by owning just a portion, the token holders get rights to the profits.”
Appealing To A Global Market
Veasna admits that most of their current investors understand the process as it has been targeted in that way. “In Cambodia there is growth in future investment and the recently held ASEAN Summits shed a positive light on the Kingdom and exposed the country to new investors” he adds.
He also says that investors overseas who have never been to the Kingdom need to filter the information on the country.
“If there is some negative news seen overseas, which sometimes may not be true, we need to help them analyse and sort through the information to understand what they are hearing and what their concerns are.
That's the one part which may need some hand-holding in this investment process for those international investors. Helping them understand the facts and how business is done in Cambodia.”
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