BlocHome, a Luxembourg blockchain real estate investment platform, has arranged a guarantee that will allow it to finance the first security token-based residential project in Europe, an eight million euro housing project in Luxembourg known as the “Clapton Residence”, without waiting for further fund-raising. The guarantee was arranged after the firms’s first project attracted 2.15 million euros in tokenised investments from 280 investors.
“We found some investors that said we will substitute for the (BlocHome real estate) investors if there’s any need at the end,” said Jean-Paul Scheuren, a director and part of BlocHome’s founding team.
The real estate platform is seeking to lower investment cost barriers to the asset class, offering real estate ownership from as little as 1,000 euros. BlocHome is the first project of LetzToken, a Luxembourg start-up supporting security token-based projects. Letztoken structures projects by digitalising them to offer fractionalised assets at more affordable prices.
280 investors buy tokens
The BlocHome platform launched its services in December 2021, offering the eight-unit Clapton Residence in Cessange to its subscribers. To date, some 280 people have invested in the Clapton residence, allowing the issuance of 2,150,000 euros in tokens. These investors will eventually become the building’s co-owners when it has been acquired.
The platform appears to be rapidly increasing the amount of amount of money invested - in August, the firm told Investment Officer it had raised 1.7 million euros from 250 investors.
However, as BlocHome’s Maroun Altekly stated, the “total Token Price” of the Clapton is 7,999,000 euros, “including all transfer, tokenisation, commercialisation, building management and set-up costs.”
To bridge the gap, BlocHome has arranged financing that will allow it to move within the next few weeks to buy the building with the level of investment raised to date. The guarantee enables BlocHome to let go of its earlier 4 million euro investment fundraising goal.
“We have taken guarantees that will allow us to cover up if we should not be able to manage to raise the 4 million amongst retail customers,” said Scheuren. “We will continue to raise money because the BlocHome’s objective is to finance 100% of Clapton without a credit.” He explained this would mean minimal leverage and interest exposure.
Fundraising target
The building’s transformation is on schedule and set to be delivered in March 2023, at which point community members will move in as tenants, said Alteky. “Our early adopters will have the advantage of living in the building,” he said. “The main criterion for choosing the tenants is: first come, first served and not the amount invested in the project.”
“BlocHome’s long-term vision is to create a global real estate community where members can adjust the ownership and use of their properties to suit their personal needs,” the organisations said in a release.
The the platform has decided to increase the valuation of its tokens by 6%, from 1 euro to 1.06. Investors will be given another opportunity at 1 euro in a campaign that BlocHome will very soon announce.
Partnership and plans
LetzToken/BlocHome also announced a partnership with RMS Immobilière s.à.r.l. which it said would “help the BlocHomers community grow faster.”
BlocHome has announced long-term international plans and aspirations. New investors are still welcome until all shares are sold.
Related articles on Investment Officer Luxembourg:
- VP Bank shows how tokenisation can be applied
- Luxembourg set for mass adoption of tokenisation
- BlocHome offers alternative approach to home ownership