As some of you may have heard, Shojin Property Partners and Smartlands have been in talks over the last few months regarding the launch of the first ever tokenisation of property investment in the UK. We feel that it is an opportune time to share some more information about this partnership to help our investors understand the collaboration in a little more detail.
For Shojin, this is another avenue to enable individuals to invest in property. Shojin Property Partners will continue to operate independently with its own investment platform. Additionally, Shojin will provide Smartlands with property investment opportunities that have gone through the same rigorous due diligence process. The Smartlands platform enables investors to invest in digital tokens backed by property and stored on the blockchain, as well as use cryptocurrency payment methods. This is all about giving investors choice.
WHO ARE SHOJIN PROPERTY PARTNERS? Shojin Property Partners is an FCA regulated property investment crowdfunding company. We enable investors from around the world the opportunity to invest in UK property with as little as £5,000. We open up the entire property sector so that investors can spread their risks and invest in projects that they would not previously have had access to. Shojin is one of the only companies to co-invest alongside investors and share the profits. Shojin’s key philosophy is aligning their interests with those of their investors.
WHO ARE SMARTLANDS? Smartlands are a global blockchain-based platform for security tokenisation. Their subsidiary, Smartlands Platform Limited, are an appointed representative of Shojin Financial Services Limited, allowing them to undertake FCA regulated business using their proprietary platform for the issuance of security tokens backed by property in the UK. Smartlands bring together token issuers and investors to create blockchain-based securities backed by digital ownership of shares in multiple asset classes.
SHOJIN AND SMARTLANDS STRATEGIC PARTNERSHIP In March 2019, Shojin Property Partners and Smartlands entered discussions regarding the tokenisation of property investment opportunities in the UK. On Saturday, 18 May the first investment opportunity from Shojin Property Partners, in the form of a purpose-built student accommodation (PBSA) block in Nottingham, was launched for investment via the Smartlands platform.
Commercial negotiations are ongoing between Smartlands and Shojin about solidifying the relationship with a common goal, but in the meantime Smartlands Platform Limited has been granted Appointed Representative status by Shojin Financial Services Limited so that they can start to build a market in tokenisation or property.
In agreeing to test the first project on the Smartlands platform and with the option of launching more projects in the future, Smartlands and Shojin are demonstrating their joint desire to share their values and vision to make property investment more accessible to a global audience.
WHAT IS THE DIFFERENCE BETWEEN INVESTING WITH SHOJIN OR SMARTLANDS? If you invest in property through Shojin Property Partners, you would invest using traditional currency (GBP) and be issued with share/bond certificates of ownership once you have made an investment. Every project that is presented on the Shojin platform has gone through extensive due diligence to ensure that it meets stringent investment criteria and protection for investors.
By investing through the Smartlands platform, you will still benefit from Shojin’s project due diligence and structuring expertise, however the ownership will take the form of security tokens. You are able to exchange traditional currency and cryptocurrency into Smartlands security tokens, which in turn are used to make investments into schemes such as the Nottingham purpose-built student accommodation.
WHAT ARE SECURITY TOKENS? A security token represents a share or value in an asset or company. Security tokens are also known as equity tokens and compared to the way in which you would purchase shares or ownership in a company or property. Security tokens have tangible value and are backed by an asset rather than a speculative value like utility tokens.
If we relate that to property tokenisation, it is the process of representing the ownership of real-world assets digitally on a blockchain. For example, £1 could be worth one digital token and be used to invest into property.
SECURITY TOKEN OFFERING (STO) LAUNCH On 18 May, Smartlands launched the second stage of funding, the public sale. This gave individuals the opportunity to purchase STO tokens which would enable them to invest in a 124-unit Purpose-Built Student Accommodation development in Nottingham. Initially this project was launched on the Shojin crowdfunding platform, however a proportion of the project was earmarked to launch on the Smartlands platform in May 2019.
DO I HAVE LEGAL OWNERSHIP OVER MY INVESTMENT IF DONE USING SECURITY TOKENS? The short answer is yes. Like with a crowdfunding investment you would have legal ownership when you invest in security tokens. Instead of being issued a share or bond certificate you would be issued tokens which represent ownership. To be able to convert your security tokens back into traditional currency you would need exchange your tokens into traditional currency on an exchange.
ARE SMARTLANDS REGULATED? In order for Smartlands to operate in the UK they need to become licenced and regulated by the FCA. By working with Shojin Property Partners, they are able to operate under the Shojin Financial Services Limited regulated license as an appointed representative (AR). Additionally, it is required that there are people in the company approved by the FCA as ‘fit and proper’ to carry out the ‘controlled functions’ associated with being a director of a regulated company. Smartlands Platform Limited received its AR appointment in May prior to launch of the first investment opportunity.
HOW DO YOU INVEST IN SECURITY TOKENS? In order to invest in our Nottingham Student Investment opportunity through the Smartlands platform you would need to do the following:
- Go to the Smartlands website and choose a suitable investment
- Click on the investment and read all about the opportunity
- Enter the number of tokens you would like to buy
In accordance with FCA regulations, you will need to register on their platform and complete the KYC process in order to view opportunities.
WHAT IS KYC? KYC stands for ‘Know Your Customer’ and is the process of verifying a client’s identity and assessing potential risk for the business relationship. The KYC process is a legal requirement by the FCA and in compliance with UK money laundering regulations. Since Shojin’s crowdfunding business is regulated by the FCA, they need to comply with strict regulations to protect investors.
CONCLUSION Hopefully the above has been a useful insight into the respective roles of Shojin and Smartlands, and the aim of the collaborative venture between the two companies. Learn more about Shojin Property Partners and their Property Crowdfunding model. Learn more about investing in property by watching our video What is property investment crowdfunding? Follow us on social media for the latest property investment news, tips and updates Facebook, Twitter, YouTube and LinkedIn.